Industry and trade developments reported on 20 December 2019

A. Macroeconomic Performance and Enterprise Development

1. Economic Growth and Capital Markets

• Vietnam’s GDP growth for 2019 is estimated at 6.8%, which the World Bank describes as an impressive performance amid a global slowdown.
• To maintain this momentum, experts recommend unlocking the potential of capital markets to support the development of the private sector.

2. Support for Enterprises

• Prime Minister Nguyễn Xuân Phúc is scheduled to hold a dialogue with the business community on 23 December 2019, focusing on the theme “Strong Enterprise Development – Integration, Efficiency, and Sustainability”.
• The Ministry of Planning and Investment has partnered with the Japan International Cooperation Agency (JICA) to support the development of Small and Medium Enterprises (SMEs) within the industrial sector.

3. Information Technology (IT) Industry

• Foreign Direct Investment (FDI) enterprises continue to dominate the domestic IT sector, accounting for over 90% of the industry’s export revenue.
• A recent workshop highlighted the need for strategic tasks and solutions to develop the IT, electronics, and telecommunications industries leading up to 2025 and 2030.

B. International Trade and Export Performance

1. Record-Breaking Milestones

• For the first time, Vietnam’s total import-export turnover reached the $500 billion mark, with a projected trade surplus of approximately $9 billion for 2019.

2. Regional Trade Dynamics

• The Ministry of Industry and Trade (MoIT) has issued recommendations to help businesses maintain and expand their market share in China across production and trade promotion.
• Despite overall growth, export turnover for several commodity groups to the European Union (EU) has seen a significant decline.
• The EVFTA and EVIPA agreements are expected to open vast opportunities for Vietnamese goods to enter the European market.

3. Trade Defense and Origin Fraud

• Hoa Sen Group was officially excluded from the US list of enterprises subject to a 456.2% anti-circumvention tax on certain steel products.
• Authorities have warned that trade fraud regarding product origins poses a serious risk to Vietnam’s export reputation and may lead to increased global trade remedy investigations.
• Rice exports in the first 11 months of 2019 increased by 4.1% in volume but decreased by over 9% in value due to falling prices.

C. Domestic Market and Price Stabilisation

1. The Pork Supply Crisis

• Pork prices have surged past 90,000 VND/kg due to scarcity caused by African Swine Fever and illegal exports to China.
• There is an ongoing debate between the MoIT and the Ministry of Agriculture and Rural Development (MARD) regarding the responsibility for delayed pork imports.
• MARD estimates a shortage of 200,000 tons and suggests importing at an appropriate time, clarifying that there are no longer specific import quotas, only quarantine requirements.
• Ho Chi Minh City authorities are encouraging citizens to switch to frozen pork to alleviate demand for fresh meat.

2. Tết Holiday Price Management

• The Ministry of Finance has issued a directive to strengthen price management and stabilisation before, during, and after the Lunar New Year to prevent abnormal market fluctuations.
• Localities are urged to prevent the illegal smuggling of pigs across borders to ensure domestic supply.
• Prices for seasonal goods like dragon fruit are rising, doubling in price compared to two months prior.

D. Energy and Industry Updates

1. Power and Petroleum

• While the power supply is expected to remain stable for 2020, officials warn that ensuring national energy security will be extremely difficult between 2021 and 2025.
• Global WTI crude oil prices reached a three-month high, trading at approximately $61.08 per barrel following optimistic economic data.

2. Corporate and Environmental Developments

• ThaiBev has officially denied rumours that it intends to sell its shares in Sabeco.
• Habeco has terminated its contract to sell beer dregs to a long-term partner following the contract’s expiration.
• Petrolimex and Petrovietnam are focusing on internal professional training and corporate culture restructuring for 2020.
• Cao Son Coal is implementing modern technological solutions to prevent environmental pollution at the source during production.

E. Food Safety and Trade Promotion

1. Safety Standards and OCOP Programs

• Hanoi is expanding a pilot program for specialised food safety inspections to improve local management effectiveness.
• Trade promotion for “One Commune, One Product” (OCOP) items is being intensified, including events like the “Ha Giang Orange Week” in Hanoi.

2. National Branding

• Efforts are being made to build a national brand symbol for Vietnamese coffee to enhance its value in both domestic and international markets.