Industry and trade developments reported on 26 December 2019
A. Extraordinary Trade Performance and International Integration
- Record-Breaking Export Figures
- Despite a challenging global environment, Vietnam’s total import-export turnover surpassed the $500 billion milestone, with exports reaching approximately $264 billion, an 8% increase from 2018,.
- The country achieved a record trade surplus of nearly $10 billion, marking the fourth consecutive year of surplus,.
- The export structure remains concentrated, with eight commodity groups exceeding $5 billion and six groups exceeding $10 billion in value, collectively accounting for 92.86% of total export turnover,.
- Strategic Integration and Trade Defense
- The Ministry of Industry and Trade (MoIT) is actively supporting businesses to leverage Free Trade Agreements (FTAs) like the CPTPP and EVFTA through legal internalisation and modernisation of Certificate of Origin (C/O) issuance.
- Authorities are intensifying efforts to combat origin fraud and illegal transshipment to protect the integrity of Vietnamese exports.
- Challenges remain, as the US Department of Commerce issued a final ruling imposing duties of up to 456% on certain steel products from Vietnam that utilise materials from South Korea and Taiwan.
- Additionally, shrimp exports failed to meet the annual target of $4.2 billion despite a slight recovery in the EU market toward the end of the year,.
B. Administrative Reform and the Business Environment
- Regulatory Streamlining
- Under Government Resolution 02, the MoIT has fundamentally completed the reduction of 50% of specialised inspection procedures and items,.
- A new web portal has been established to provide transparency regarding business conditions and to offer a direct channel for addressing corporate inquiries.
- Investment and Business Sustainability
- Vietnam’s outward investment reached $508.14 million in 2019, with Australia emerging as the leading destination, receiving $154.6 million.
- While the number of new businesses is growing, the environment remains difficult; the rate of enterprises suspending operations or dissolving averaged 58.1% between 2017 and 2019.
C. Energy Security and Industrial Development
- National Power Supply and Infrastructure
- Prime Minister Nguyễn Xuân Phúc noted that Vietnam’s power capacity now ranks second in ASEAN and 23rd globally.
- However, there is significant concern regarding the delayed progress of power projects outside of EVN, which threatens long-term energy security,.
- The government has mandated that there must be no power shortages under any circumstances to support economic development.
- To address gas shortages, domestic private capital is increasingly being directed toward Liquefied Natural Gas (LNG) projects.
- Petroleum and Mining Sector
- Bình Sơn Refining and Petrochemical (BSR) signed a deal to import 5 million barrels of Azeri light crude oil at a 0% tax rate, which is expected to save the company 800 billion VND.
- Global oil prices saw a slight rise (WTI at $61.07/barrel) driven by US-China trade optimism and OPEC+ production cuts.
- Lam Dong Aluminum (LDA) reported a successful year, completing all production plans while maintaining environmental safety standards.
- Sectoral Targets and Constraints
- The textile and garment industry has set an export target of $41.5–$42 billion for 2020, aiming for 6% growth over the next five years.
- Conversely, the domestic automotive industry remains constrained by high taxes and fees, which keep vehicle ownership out of reach for many citizens given current income levels.
D. Macroeconomics and Domestic Market Management
- Price Stabilisation and CPI Control
- The Consumer Price Index (CPI) for 2019 is estimated to have increased by 2.73%, with the government aiming to keep the 2020 figure below 4%,.
- To manage the pork shortage caused by African Swine Fever, Vietnam has imported 110,000 tons of pork to stabilise the market.
- High pork prices have led to decreased purchasing power, causing some traders and small businesses to face financial losses.
- Retail and Consumer Trends
- MM Mega Market launched its first retail supermarket in Hanoi, offering over 10,000 products across 7,000m².
- Global resource concerns have surfaced, particularly regarding a potential global shortage of sand, which poses risks to agriculture and the environment,.
