Decision No. 27/2007/QD-TTg dated February 15, 2007 of the Prime Minister approving the Scheme on domestic trade development up to 2010 and orientations toward 2020

DECISION

APPROVING THE SCHEME ON DOMESTIC TRADE DEVELOPMENT UP TO 2010 AND ORIENTATIONS TOWARD 2020

PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

At the proposal of the Trade Minister,

DECIDES:

Article 1.- To approve the Scheme on domestic trade development up to 2010 and orientations toward 2020 with the following principle contents:

I. DEVELOPMENT VIEWPOINT

1. To develop domestic trade in accordance with the objective rules of the market economy, ensuring the right to autonomy, freedom of business and equal competition among entities in an ever-improving legal environment under the State's macro-regulation.

2. To combine the domestic trade development with the development of diversified forms of ownership, economic sectors, organizational types and operation modes of trade entities. To pay attention to developing small- and medium-sized enterprises, business households while promoting the development of large trade enterprises after the model of conglomerates having modern distribution systems and playing the core role in setting market trends, for the purpose of orientating production and consumption.

3. To develop commodity trade closely linked with investment, production and trade in services according to the roadmap of our international commitments; at the same time, to take the initiative in meeting the market's and local consumers' more and more diversified demands.

4. To develop domestic trade on the basis of mobilizing to the utmost all social resources; to attach importance to boosting enterprises' capability to accumulate and muster up resources for investing in the development of trade infrastructure and expanding their business networks.

II. DEVELOPMENT OBJECTIVES

1. General objectives:

To build a firmly developed and modern domestic trade with a reasonable structure of distribution systems and channels involving all economic sectors and various types of organization and operating in a competitive environment under the State's macro-management and regulation. To attach importance to developing small-sized enterprises and business households; at the same time, to encourage and promote the formation of large-sized enterprises throughout the course of accumulation and concentration, with a view to establishing big distributors of Vietnamese brands. To open the distribution market in strict accordance with the roadmap of World Trade Organization (WTO) accession commitments. To establish linkages between large-sized and small-sized enterprises in organizing markets, thus gathering strengths for effective cooperation and competition with foreign conglomerates after Vietnam opens its distribution service market. On this basis, to promote the role and position of domestic trade in orientating and boosting production development, guiding and satisfying increasingly diversified consumption demands of the people, thus contributing to developing export and stepping up economic restructuring and growth.

2. Specific objectives:

a/ Growth targets:

- Contributions of domestic trade to the national economy's GDP will reach VND 200 trillion by 2010 (accounting for 14.5%), and VND 450 trillion by 2020 (around 15%);

- The annual growth rate (exclusive of price fluctuation) of total goods retail sales and consumption service turnover in the period from now to 2010 will be 11% on average, and over 10% in the subsequent periods. The total goods retail sales and consumption service turnover will reach around VND 800 trillion by 2010 and around VND 2,000 trillion by 2020;

- The proportions of goods retail sales by economic sectors by 2010 will be as follows: The domestic economic sectors (including the state economic sector and the non-state economic sector) will account from some 93%, while the foreign-invested sector will account for 7%. By 2020, these proportions will be 80% and 20% respectively.

- The proportions of goods retail sales by modern trade types (trade centers, department stores, chains of convenience stores, etc.) will be 20% (around VND 160 trillion) by 2010 and 40% (around VND 800 trillion) by 2020;

b/ To modernize trade infrastructure; to attach importance to constructing and developing the system of modern trade infrastructure (trade centers, department stores, shopping centers, trade ' service areas, convenience stores, specialized shops, logistics centers, wholesale storehouses, trade fair and exhibition centers, etc.) in urban centers, industrial parks, economic zones, export processing zones, border-gate economic zones; to basically complete the program on development of various types of market (marketplaces for people's daily-life needs in rural, deep-lying, remote and border areas, islands, and central markets, markets for particular commodities, wholesale markets in consolidated farm produce production areas and big consumption markets);

c/ To develop other diversified types and modes of modern trade business, such as: goods exchanges, auction centers, franchise, e-commerce, etc.;

d/ To form and develop a number of strong commercial groups trading in specialized or general goods, capable of competing and having sufficient conditions for efficient cooperation with foreign distribution groups after Vietnam opens its distribution service market;

e/ To develop the trade sector's human resources who have modern and professional knowledge, skills and qualifications to meet the development requirements of domestic trade in the context of international economic integration;

f/ To perfect regulations on state management of trade, ensuring healthy and sustainable development of trade activities; to raise the domestic market's adaptability to world market changes.

III. DEVELOPMENT ORIENTATIONS

1. To develop enterprises of diversified types and different sizes, which will increase in quantity and operate after modern and professional models in accordance with the rules of goods circulation.

To renew organization models, management technologies and business modes toward professionalism and modernity, with a view to incrementally developing the following principal types of trade enterprise:

- Groups, parent ' affiliate companies trading in specialized goods;

- Groups, parent ' affiliate companies trading in general goods;

- Modern retail companies;

- Modern wholesale companies;

- Companies providing logistics services;

- Companies (or cooperatives) managing and commercially operating in markets;

- Joint-stock companies producing, processing and selling farm produce and foodstuffs;

- Rural trade and service cooperatives;

- Trade business households.

2. To develop diversified types of trade infrastructure suitable to the characteristics and development level of the market in each geographical area (region, area, locality or the whole country), and harmoniously combine traditional trade with modern trade.

Depending on the characteristics of the market in each geographical area and of each economic space, various types of trade infrastructure shall be arranged and developed with different sizes, characteristics and levels, and along the following principal orientations:

a/ Traditional types of market and modern forms of wholesale of farm produce:

- Rural markets;

- Urban markets;

- Border markets, border-gate markets, markets in border-gate economic zones;

- General goods wholesale markets or markets supplying specialized goods for wholesale;

- Goods exchanges and auction centers.

b/ Modern types of trade:

- Trade centers, department stores;

- Shopping malls, trade and service zones;

- Logistics centers, wholesale storehouses;

- Virtual department stores, virtual markets, online sale and purchase intermediaries.

3. To develop models of circulation based on each goods line's market, suitable to production characteristics and level, consumption trend and satisfaction modes, and meeting requirements of the State's macro-management.

a/ Agricultural, forest and aquatic products:

- To establish and develop direct, stable and long-term linkages between trade enterprises (engaged in domestic circulation, import and export) and processing establishments, trade and service cooperatives, rural joint-stock companies as well as farmer households, farms and establishments engaged in growing, breeding or rearing agricultural, forest and aquatic products. To create product-based links from preparation of breeds, technical assistance, input materials to production, collection, purchase, preservation, processing and sale (at home or abroad);

- To consolidate and develop models of rural trade and service cooperatives which link growers and breeders with trade enterprises and processing establishments, supply input materials and sell products for farmers. To encourage the formation of direct (cooperative) linkages between aquaculture and production households, trade and service cooperatives and processing establishments;

- To attach importance to building various types of market for people's daily-life needs (general goods retail in service of local farmers' production and life), wholesale markets, markets of specialized goods for wholesale, auction centers and goods exchanges in consolidated agricultural production areas (where agricultural products are wholesaled to markets in other regions, for processing and export); wholesale storehouses, logistics centers (where products are preserved, preliminarily processed, sorted, packed or transported to get added value and be supplied to domestic wholesale and retail networks and for export);

b/ Consumer goods:

- To form and develop trading centers, wholesale centers, technology markets, materials and auxiliary materials markets in urban centers, industrial parks, economic zones, export processing zones, border-gate economic zones, etc., which will be linked with the world market through exporting and importing activities in order to stabilize input materials for consumer goods production with low cost and high efficiency;

- To attach importance to rapidly developing a modern distribution system after the model of "chain stores," with a view to expanding distribution within economic spaces, particularly to urban centers, industrial parks, economic zones, export processing zones and border-gate economic zones. To develop circulation channels to rural areas. The business scale will be developed large enough for organizing a system of logistics centers and wholesale storehouses. To apply information technology to e-commerce management and development. To expand distribution system by mode of franchise, with a view to making domestic trade truly a material force capable of influencing and directing production and guiding consumption development.

c/ Important or special goods lines:

Major orientations for enterprises to develop models of organization of circulation of these goods lines include:

- To consolidate the existing distribution system on the basis of forming vertical linkages that closely and stably bind together all stages of the distribution process from production, import or export to wholesale and retail through direct relationship or purchase and sale agency relationship. Source enterprises (producers or importers) shall control and bear responsibility (or joint responsibility) for the whole system, from costs, prices, origin, quantity, quality and labels of goods to service provision modes and quality;

- To establish a distribution system on the basis of building and developing a system of wholesale storehouses and a system of logistics centers located in different market areas to receive goods from production and import establishments and supply goods for the wholesale and retail networks (outlets and agents) in the localities;

- To encourage enterprises to trade in goods groups or items that are interrelated in consumption, and develop transversal linkages in the distribution stage so as to reduce investment and circulation expenses as well as social expenditures through saving of shopping time (transversal linkages in the wholesale process are developed through jointly building transaction centers, wholesale storehouses and logistics centers; while those in the retail process are developed through jointly developing a system of convenience stores);

- The State intervenes in the market of these goods lines mainly through issuing regulations on organization and control of the distribution system and using such indirect tools as credit, interest rate, taxation, national reserves, etc., in order to influence the market through source enterprises.

IV. DEVELOPMENT SOLUTIONS AND IMPLEMENTATION ORGANIZATION

1. Perfecting the legal framework and creating a stable and healthy business environment:

a/ Ministries and branches shall expeditiously elaborate and submit to the Government for promulgation legal documents detailing and guiding the implementation of laws governing trade activities (decrees on management of cigarette, liquor or fuel gas trading; sanctioning of administrative violations in trade sector, etc.); review and revise legal documents concerning technical barriers (quality standards, food hygiene and safety standards, environmental standards) in order to protect the domestic market and consumers' interests;

b/ The Trade Ministry shall:

- Elaborate standards and provide guidance for the development of various types of trade business organization, serving as a basis for enterprises to make investment decisions, facilitating state management work and guiding consumers in choosing shopping places;

- Elaborate regulations on organization and management of distribution systems of important or particular goods items (such as petrol, oil, fuel gas, cement, iron, steel, fertilizers, pharmaceuticals, explosives, liquors, cigarettes), ensuring the principle that the State can control and use indirect tools to influence in time the market through source enterprises;

- Guide in detail the realization of commitments on opening the distribution service market to foreign-invested enterprises with respect to the provision of wholesale, retail, commercial franchise and agency services.

2. Market inspection and control:

a/ Line management ministries shall, within the ambit of their functions and assigned duties, direct functional bodies in intensifying market inspection and control; strictly handle acts of committing trade frauds, trading in counterfeit goods, goods of inferior quality, goods not up to food hygiene and safety standards, and industrial property-infringing goods, in order to assure the interests of consumers, enterprises and the State;

b/ The Trade Ministry shall assume the prime responsibility for elaborating and submitting to the Prime Minister a scheme on raising the effectiveness of market inspection and control in the direction of assigning a ministry the prime responsibility for inspecting and supervising goods quality and standards, food safety and hygiene, intellectual property, smuggling and trade fraud combat, business registration, ensuring unified, effective and efficient state management to meet development and integration requirements, creating an equal competitive environment for entities of all economic sectors, and protecting consumers' interests.

3. Market management:

The Trade Ministry shall assume the prime responsibility for, and coordinate with ministries and bodies being members of the domestic market management team in, taking the initiative in applying necessary measures to raise the quality and effectiveness of market management, concentrating on raising the quality of market information and forecast; analyzing changes in the supply-demand balance and market prices; applying a mechanism to coordinate state management agencies in devising and implementing timely intervention solutions when the market shows signs of instability, ensuring the supply-demand balance of essential goods in any circumstances.

4. Trade development planning:

The Trade Ministry shall:

a/ Promptly elaborate, approve or submit to competent authorities for approval a master plan on trade development, a planning on development of trade infrastructure throughout the country and in different economic regions, which are compliant with current provisions of law;

The master plan on trade development constitutes part of the socio-economic development plan; the planning on development of trade infrastructure constitutes part of the land use planning; these trade plannings, after being approved by competent authorities, constitute a legal ground for deciding on investment projects on construction of commercial infrastructure;

b/ Inspect and supervise the approval and implementation of the master plan on trade development and local plannings on development of trade infrastructure in line with national and regional trade plannings.

5. Policies and solutions to promote investment in development of trade infrastructure:

The Trade Ministry shall assume the prime responsibility for studying and proposing to the Government and the Prime Minister mechanisms and policies on investment incentives and supports for projects on development of trade infrastructure as for investment projects on other production or business lines in the same locality.

6. Raising of quality of human resources:

a/ The Trade Ministry shall elaborate a scheme on mobilization of domestic and foreign capital sources to provide financial supports for the training and development of human resources of trade enterprises;

b/ The Finance Ministry shall allocate annual budgets for upgrading material-technical foundations, building up the contingent of teachers as well as contents and programs of training and retraining in the distribution field for colleges, secondary schools and job-training schools under the Trade Ministry, in order to satisfy the need for raising the quality of human resources for the trade sector.

7. Enterprises are encouraged to establish wholesale and retail markets, department stores associations (with importance attached to the involvement of business households) in order to assist members in sharing experience, exchanging information, seeking opportunities for joint-ventures and linkages, supporting domestic trade promotion, intensifying brand development and promotion, etc.

Article 2.- This Decision takes effect 15 days after its publication in "CONG BAO."

Article 3.- Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and presidents of provincial/municipal People's Committees shall implement this Decision.