concentrated, until the late 1970s in China, the market economy was still a new issue. Therefore, in the process of construction and development, China had to go through many stages of exploration and experimentation, gradually forming a market economy. It can be seen that the process of transition to a market economy in China went through the following main steps:
First, after the 3rd Central Conference of the 11th term (December 1978), the perception of Chinese officials changed and gradually moved away from the traditional concept that the market economy is unique to capitalism and that centralized planning is the characteristic of socialism.
At the 12th National Congress of the Communist Party of China (CPC) (1982), China introduced a new concept - combining planned economy with market regulation , in which planned economy is the main one and market regulation is secondary. At the 3rd Central Conference of the 12th tenure (October 1984), China passed the decision to "Reform the economic system", building a planned commodity economy on the basis of public ownership.
In the second step, at the 13th National Congress of the Communist Party of China (October 1987), China proposed the construction of a planned socialist commodity economy in which there is unity between planning and the market. Here, for the first time, China put forward the theory of the initial stage of building socialism, considering the Chinese economy as a planned commodity economy on the basis of public ownership. It required the development of a multi-sector economy under the premise of "taking public ownership as the main subject", encouraging a part of the population to get rich first by working well and doing legal business, with the goal of getting rich together.
Third, the 14th National Congress of the Communist Party of China (October 1992) introduced the concept of "Socialist Market Economy", which affirmed that the socialist planned commodity economic system is a unified system between planning and the market, replacing the concept of "commodity economy" of the 13th National Congress.
The socialist market economy with Chinese characteristics is the development of the market economy in the People's Republic of China, which combines rapid economic growth with ensuring social equity. The reason for abandoning the planned economy and shifting to a market economy is because the market economy allows for a more efficient allocation of society's scarce resources. However, in the process of operation, the market economy gives rise to many problems, including the conflict between implementing social equity and rapid economic growth. Resolving this conflict is the goal of the socialist market economy model that China has been pursuing.
The main idea of the State management model in the market economy in China is " Small government, big society. "
"Small government" means that the Government and the State only focus on key tasks that are decisive for the stable and effective development of the entire economy, rather than taking on too much, doing things that the market operates more effectively. The tasks that the Government and the State must do are: building the country's socio-economic development strategy; planning the development of regions and industries; promulgating the legal framework and economic policies, especially financial and monetary policies; participating in and organizing the provision of socio-economic infrastructure services; supervising and inspecting economic activities; ensuring conditions for the formation and completion of market institutions, etc.
For enterprises of all types of ownership, the State implements macro management measures without directly intervening in business activities. For state-owned enterprises, China implements management according to the principle of “ holding the big, leaving the small ”. The State only “holds” and manages large enterprises, enterprises operating in a number of important fields related to national livelihood, the rest is mainly left to the market.
regulation, the State only intervenes through policies, general orientations and market tools.
“Great society” means strongly promoting the freedom of business of all people, the autonomy, autonomy and self-management of enterprises.
In fact, implementing the motto "Small Government, Big Society" has reduced the cumbersomeness of the State management apparatus at all levels, streamlined the civil servant payroll, and gradually separated functions between the Party and the State, between the government and enterprises.
After more than 20 years of reform and opening up, shifting from a centralized economy to a market economy, China has achieved brilliant achievements. China has the world's leading economic growth rate. Within 21 years (1979 - 2000), China's gross domestic product (GDP) grew by an average of 9.8% per year. Currently, China has become an economic power with the 6th largest GDP in the world. Many important products of China are the world's leading in terms of output. In addition to the two commodities of coal and fabric, China has always been the world's leading commodity, while 8 other commodities ranked from 2nd to 16th before the reform have now risen to the world's leading position, such as: grain, cotton, oilseeds, pork, beef, sheep, steel, clothing, cement, and television. China has made rapid progress on the path of building a socialist market economy with Chinese characteristics in the direction of openness and international economic integration. People's lives have improved significantly.
Besides the outstanding achievements, China has encountered many difficulties and contradictions such as the quality and efficiency of the entire national economy is not high, the economic structure is not reasonable; state-owned enterprises operate inefficiently; corruption, extravagance and waste are still widespread; bureaucracy, formalism, and fraudulent business practices are still quite serious; income distribution relations have not been properly handled,
Regional disparities in living standards and development rates remain stark; population growth and economic growth are placing enormous pressure on resources and the environment.
China's 20 years of reform and opening up are also 20 years of experimenting with a new management system for a transitional economy. The successes and failures of that system can help us draw the following lessons on economic management:
- Clearly define the goals, functions and objects of State economic management.
- Complete the economic legal system.
- Innovate macroeconomic policies to stabilize the macro economy, encourage growth and achieve social equity.
- Create conditions for the development poles to quickly rise up to support and attract the development of the entire economy.
- Carry out economic restructuring in all localities and levels, right from each village and commune.
- Divide the market into levels to develop a variety of goods with different grades and types to meet the needs of all consumer classes.
Above we see that there are many different views on the role of State economic management in a market economy: there are views that emphasize the role of the State, on the contrary, there are views that underestimate the role of the State. However, among these different views, one can still see important similarities, which is the need for coordination between the visible hand of the State and the invisible hand of the market. The State and the market have a complementary relationship for development, not mutually exclusive leading to failure, crisis, stagnation and backwardness. It has become clear and can be affirmed that the State plays an important role in a market economy. However, the State cannot
replace, and even more so, eliminate the market. The State and the market always coexist and develop together. Any excess on either side - whether it is excess on the part of the State or the market - leads to failure, if it is not a market failure, then it is certainly a failure of the Government. It is from this perspective that many researchers have advised that no matter what type of State, to achieve efficiency, the best way for a State to do is to implement policies and measures to " create a market ", not to destroy the market, or " encourage the market rather than prohibit the market ".
Chapter 2
THE ECONOMIC ROLE OF THE STATE IN THE SOCIALIST-ORIENTED MARKET ECONOMY IN VIETNAM: CURRENT SITUATION AND SOLUTIONS
2.1. Current status of the economic role of the State in Vietnam
2.1.1. The role of the state in building a legal system for a socialist-oriented market economy in our country
During the period of centralized planning, the State managed the economy mainly by planning tools. When switching to managing a socialist-oriented market economy, the promulgation of a legal framework for the operation of this transitional economy became a requirement that was both urgent in the short term and very fundamental in the long term, including things that could be amended and supplemented from the existing legal system, although very few (such as the Constitution), and things (the majority of which) were completely new, had to be done from scratch, and had no precedent (such as the Law on Foreign Investment).
Because the Vietnamese State is organized according to the principle of democratic centralism, in which state power is unified, with division and coordination among state agencies in the implementation of legislative, executive and judicial powers, the legal system in the market economy in our country is also promulgated in many different forms, including issues issued by the National Assembly in the form of Constitutional documents, Laws (or Codes), Ordinances, there are issues issued by the Government in the form of Resolutions and Government Decrees, Decisions and Directives of the Prime Minister, Decisions and Circulars of Ministers, there are issues issued by the People's Council and People's Committee in the form of Resolutions of the People's Council, Decisions and Directives of the People's Committee.
people
* The renovation period while the 1980 Constitution was still in effect
onion (1986-1991).
The most important feature of this period is that many of the Party's Renovation policies and guidelines were determined by the Resolution of the 6th National Congress to have gone beyond the framework of the 1980 Constitution, but this Constitution has not been amended in time. Due to this delay, despite many efforts by the State management of the economy in innovating organization, management, and operation, the economy was not able to revive the declining economy. The economic growth rate in 1987 decreased to 3.4%, increased to 4.6% in 1988, decreased again to 2.7% in 1989, and increased to only 2.3% in 1990. The current situation of economic law innovation in this period raised the following issues:
Because the Constitution (1980) had not been amended, during this period, the management mechanism had no legal basis to change compared to before the renovation. During the period 1986-1991, the most significant legislative activity was the National Assembly's promulgation of the "Foreign Investment Law" in 1987. This was a legal document that not only demonstrated Vietnam's determination for renovation in general but also chose a breakthrough in terms of opening up in particular right from the first year of the transformation.
To fill the gap caused by the delay in amending and supplementing the Constitution (1980), the Politburo sometimes had to issue directives and resolutions to direct the implementation of the renovation policy, of which the typical one is Resolution 10 of the Politburo (April 5-8).
- 1988) on contract policy in agriculture.
Government and Government agencies in the period 1986 - 1991 were highly mobilized to research and plan the institutional system and policies of the renovation period according to the Resolution of the 6th Congress. Although not many legal documents on economic management innovation have been issued, during this period the Government has carried out research on many issues.
A series of draft laws, ordinances and decrees to serve the promulgation in the following period.
In the management and operation work of the period 1986 - 1991, the Government focused on directing the resolution of the complicated developments of budget deficit, price instability, and the devaluation of the Vietnamese currency against the US dollar and other strong foreign currencies (these tasks were then grouped together and called anti-inflation). If the average price index in 1986 (compared to 1985) was reduced to only 167.5% in 1991, it must be admitted that the Government was successful in many aspects of anti-inflation during this period. The achievements in anti-inflation created one of the most important bases for Vietnam to continue implementing the renovation process in the following period.
* Period from the 1992 Constitution to present.
The most important feature of economic law innovation in this period is the promulgation and implementation of a legal system in accordance with the requirements of institutional development of a market economy based on Vietnam's viewpoints identified at the 6th Congress and gradually improved through the 7th, 8th, and 9th Congresses of the Party. The current situation of economic law innovation in this period has raised the following issues:
- Amending the 1980 Constitution, promulgating the amended Constitution in 1992, including on the economic regime:
The 1992 Constitution recognizes private ownership as one of three legal ownership regimes in the economy (the 1980 Constitution did not have this recognition).
The 1992 Constitution recognized 5 economic sectors: State-owned economy, collective economy, private capitalist economy, and state capitalist economy (the 1980 Constitution only recognized 2 sectors: state-owned economy and cooperative economy).
The 1980 Constitution stipulates that the State holds a monopoly on foreign trade and
all other economic relations with foreign countries. This was no longer retained in the 1992 Constitution.
The 1980 Constitution affirmed that "the State leads the national economy according to a unified plan". This was amended in the 1992 Constitution, according to which "the State unifies the management of the national economy through laws, plans, and policies".
Along with other amendments, the above amendments to the Constitution's provisions on the economic regime have created high legal bases for the development of the market economy, while also laying the legal foundation for innovation in state economic management.
- Promulgate in accordance with the provisions of the 1992 Constitution codes, laws, and ordinances to manage the economy in the process of transformation.
In the centrally planned economy before the reform, the State's economic management mainly relied on the planning system, the role of the legal system in this field was very low. When implementing the reform, the State's economic management not only relied mainly on planning tools but also on legal tools. However, in reality, although the reform process officially began in 1986, it was only after the promulgation of the 1992 Constitution that law-making truly became a top priority activity of the supreme state power agency (the National Assembly). From 1992 to present, the State has issued a series of legal documents, codes, and ordinances to serve the renovation process in general and for state management of the economy in particular, of which the most important are the Labor Code (1995), the Civil Code (1996), the Law on State Enterprises (1995), the State Budget Law (1996), the Law on Cooperatives (1996), the Law on the State Bank of Vietnam (1997), the Law on Credit Institutions (1997), the Commercial Law (1997), the Law on Value Added Tax (1997), the Law on Corporate Income Tax (1997), and the Law on Investment Promotion.
Domestic (1998), Law amending and supplementing a number of articles of the Land Law (1998), Enterprise Law (1999), Insurance Business Law (2001), Customs Law (2001), Copyright Protection Ordinance (1994), Ordinance on procedures for resolving labor disputes (1996), Consumer Rights Protection Ordinance (1999), Fees and Charges Ordinance (2001), Price Ordinance (2002), Fisheries Law (2003), Construction Law (2003), Competition Law (2004), Electricity Law (2004), Law on Promulgation of Legal Documents of People's Councils and People's Committees (2004), ...
In short, if in the years before the renovation, the issue of management by the legal system was not fully considered, then since the transition to the market mechanism, our state has gradually focused on building a legal system for the market economy to operate. Up to now, our state has built quite a lot of laws, especially during the 9th and 10th National Assembly terms, which passed major laws such as civil law, commercial law... That has gradually created a framework for enterprises to operate in production and business conditions in the market economy.
2.1.2. The role of the state in renewing economic sectors and transforming economic structure
To move to a market economy, the state must restructure the economy, including restructuring the business sector and economic sectors.
First, restructuring the business sector
As mentioned before 1986, the Vietnamese economy was basically based on the socialist economic sector with two forms: state-owned and cooperative. Since 1986, the Party's policy has been to develop a multi-sector economy including the state-owned sector, the collective sector and other economic sectors such as small-scale commodity production, private capitalist economy, state capitalist economy.
The country has many forms. In the documents of the 10th National Congress, our Party has mentioned the multi-sector economy in our country including the state economic sector, collective economic sector, private economic sector, state capitalist economic sector, and foreign-invested economic sector.
The development of a multi-sector economy has promoted strong development in production. The policy of "household contracting" in agriculture from the early days of renovation has made agricultural production "explode" from a place of food shortage to a place of food security and export.
In the industrial sector, with the participation of many components, the competitiveness of enterprises in the economy has increased. Especially for the state-owned enterprise sector, step by step restructuring, improving and innovating production techniques to adapt to new operating conditions.
The trade and service sector with its multi-component structure has been really active in the years of renovation. Free trade, free circulation, and free investment in economic sectors in general and trade and service in particular have changed the proportion of the trade and service sector in the country's GDP structure.
In general, during the years of innovation, economic components have been increasingly built, consolidated and developed.
Table 2: Economic structure in GDP
1998 | 2000 | 2001 | 2005 | 2006 | |
GDP | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
Public sector | 55.5 | 59.1 | 59.8 | 52.2 | 50.1 |
Non-state sector | 23.7 | 22.9 | 22.6 | 32.1 | 33.6 |
Foreign invested economy | 20.8 | 17.3 | 17.6 | 15.7 | 16.3 |
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![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
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zt2a3gsnon-credit services, joint stock commercial bank
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At that time, the Branch had to set aside a provision for credit risks, which reduced the Branchs income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giangs profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project Restructuring the system of credit institutions in the period 2011-2015 approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services.
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giangs products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Ministers Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giangs treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giangs income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giangs corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giangs card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
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At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services".
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Building a system to monitor water level, temperature and send warnings via SMS/GSM network - 2 -
Rules for Building a Fair Performance Management System -
Two Elements A And B Are In Two Consecutive Main Groups In The Periodic System. In Their Pure Substance State, A And B Do Not React With Each Other. Total Number Of Protons
Source: General Statistics Office; Vietnam Economic Times: Economy 2005-2006 Vietnam and the world.
Second, productivity has a new development thanks to the promotion of social division of labor.
The years of renovation were also the years of promoting the re-division of social labor. To correct mistakes caused by subjectivity and haste, wanting to promote industrialization on a large scale and at high speed, focusing on heavy industries, starting from the 5th and 6th congresses. The Party and State of Vietnam advocated shifting investment and industrialization to promote the country's advantages of labor resources, land, forests and seas. The development strategy of prioritizing agriculture, consumer goods industry, processed goods and exports was applied, leading to the re-division of social labor among industries, as well as among strategic regions nationwide.
The redistribution of social labor also changes the labor structure and occupations between production, domestic consumption and export production. The policy of diversifying import and export strengthens the activities of this sector, gradually increasing the proportion of export turnover in GDP.
All these changes gradually shift the country's economic structure towards increasing the proportion of industry and trade services, and gradually reducing the proportion of agriculture in GDP.
Table 3: Structure of industries in GDP
1991 | 1995 | 2000 | 2005 | 2006 | |
Total | 100 | 100 | 100 | 100 | 100 |
In there | |||||
Agriculture, forestry and fishery | 40.5 | 27.5 | 24.53 | 20.89 | 20.20 |
Industry, construction | 23.8 | 30.1 | 36.73 | 41.03 | 41.60 |
Service | 35.7 | 42.4 | 38.84 | 38.08 | 38.20 |
Source: General Statistics Office.
Third, the market is gradually developing.
The most obvious thing in more than 20 years of innovation is the strong development of all types of markets.
The market for consumer goods and services has developed quite strongly. The free circulation of food and foodstuffs has had a positive effect on promoting production development, from a place of food shortage to a place of food security and export. The market for consumer goods and services is increasingly rich and diverse.
The market for production factors is gradually formed. The capital market and the labor market are gradually recognized.
Foreign markets have been expanded. Up to now, Vietnam has had trade relations with over 100 countries in the world.
It is important that established market relations operate according to market rules. The principle of freedom is basically applied to the prices of goods in the consumer goods and services market, such as: food, foodstuffs, clothing, footwear, ...
It is thanks to that principle that the economy has removed the harsh constraints imposed by the previous centralized planning mechanism, allowing production and the market to "explode".
2.1.3. The role of the state in innovating macroeconomic policy tools to regulate and promote the development of the market economy
Previously, under the condition of an economy operating under a centralized planning mechanism, planning was the central tool for managing the economy.
Centralized planning has led the economy to a point where what to produce, how to produce, and for whom to produce must all follow the State's planning orders. From input, to the production process, and to output, everything is carried out according to a unified order issued from a center. This type of planning is completely contrary to the market mechanism and is not accepted by the market.
During the years of innovation, we have changed the State's economic management method from centralized planning to using macroeconomic tools and policies and building a legal environment to manage and operate our country's economy.
Regarding planning: planning innovation begins with narrowing down legal targets and strengthening guiding targets. That has expanded the autonomy and creativity of production and business units.
Next, planning was fundamentally reformed at the macro level, and socio-economic development plans were built with orientation based on socio-economic development strategies, target programs and medium- and long-term development projects.
In recent years of innovation, our state has gradually innovated financial and monetary policies.
Since the 1990s, our state has actively built and implemented a unified tax system covering the multi-sector economy. Innovating and using monetary policy tools more effectively, thus controlling and maintaining low inflation. Financial and monetary policy tools such as state investment, taxes, interest rates, insurance, subsidies, and monetary volume have gradually been used as macroeconomic tools for the state to regulate production such as investment orientation and encourage economic sectors to develop.
One of the evidences for this innovation is the innovation of tax policy for the business sector. In the centrally planned economy, because the private economy was not recognized by law, the state's regulatory policy was mainly focused on revenue sources from the state-owned and collective economic sectors, of which the largest were state-owned revenue policy and agricultural tax policy. When switching to a socialist-oriented market economy, the old regulatory system proved to be no longer suitable, and the state had to replace it with a new tax law system, in which in 1990 and 1991 it issued the Income Tax Law, the Sales Tax Law, the Export Tax Law, the Import Tax Law, and the Special Consumption Tax Law. These tax laws were applied equally to all economic sectors, regardless of state-owned, collective, or private. This equality is welcomed by the private economic sector, but the state economic sector has not yet adapted because the state enterprise financial regime has not been renewed promptly.
Increasing and decreasing tax rates is also one of the important steps in the state's tax reform process, in which the special consumption tax rate for some types of goods that do not encourage consumption has been increased (such as alcohol, cigarettes, votive offerings, etc.); conversely, agricultural tax (agricultural land use tax) has been considered for a large-scale reduction to create conditions to improve production conditions and farmers' income.
2.1.4. The role of the state in building income regulation policies and ensuring social equality
The stronger the development of the market economy, the more its negative issues arise, the more social polarization and inequality become evident in our country. Realizing that, along with innovation