Industry and Trade developments reported on 26 December 2019

A. INTERNATIONAL TRADE AND EXPORT PERFORMANCE

1. Record-Breaking 2019 Metrics Vietnam has closed 2019 with historic trade milestones:

• Total Turnover: Surpassed $517 billion, up 7.6% from 2018.
• Trade Surplus: Reached an all-time high of $9.94 billion (the 4th consecutive year of surplus).
• Export Groups: 32 commodity groups now exceed $1 billion in turnover, with six staples (phones, electronics, textiles, etc.) crossing the $10 billion mark.

2. Trade Defense & Global Friction

• Steel Duties: The US Department of Commerce finalized duties of 456.23% on steel produced in Vietnam using substrates from South Korea and Taiwan, citing “minor processing” to circumvent existing taxes.
• Shrimp Shortfall: Despite EU market recovery, the shrimp sector failed to meet its $4.2 billion target due to high competition and price volatility.

B. ADMINISTRATIVE REFORM AND GOVERNANCE

• Streamlining Success: The Ministry of Industry and Trade (MoIT) has cut 50% of specialized inspection procedures, modernizing Certificate of Origin (C/O) issuance through the National Single Window.
• Enterprise Survival: A sobering statistic emerged: despite high registration numbers, 58.1% of new enterprises (2017–2019) have suspended operations or dissolved, highlighting a volatile business environment.

C. ENERGY AND UTILITIES SECTOR

1. Power Capacity Rankings Prime Minister Nguyễn Xuân Phúc confirmed that Vietnam’s power system now ranks 2nd in ASEAN (after Indonesia) and 23rd globally.

• Installed Capacity: Reached approximately 54,880 MW.
• Growth: Commercial electricity sales in 2019 reached 209.42 billion kWh, an 8.87% increase.

2. Strategic Energy Deals

• BSR Crude Import: Binh Son Refining (BSR) signed a landmark deal with Azerbaijan’s SOCAR for 5 million barrels of Azeri Light crude. Abolishing the 5% import tax is expected to save the company 800 billion VND.
• Solar “Fast Start, Fast Brake”: Rapid expansion has hit a bottleneck due to grid overload, prompting a push for revised pricing mechanisms.

D. INDUSTRIAL AND CORPORATE DEVELOPMENTS

• Textile Targets: The sector has set a bullish $42 billion export goal for 2020, focusing on high-value products to leverage the EVFTA.
• Automotive Barriers: Despite 0% regional tariffs, the “cheap car dream” remains distant due to high domestic taxes, fees, and limited supporting industries.
• Listing News: Bac Na Electricity (EBA) is set to list 15.5 million shares on the HNX, signaling investor interest in the energy utilities market.

E. DOMESTIC MARKET AND MACROECONOMICS

1. CPI & Inflation Control The 2019 CPI is estimated at 2.73%, well within the government’s <4% threshold. However, 2020 faces upward pressure from fuel and food costs.

2. The Pork Crisis & Lunar New Year

• Imports: To combat African Swine Fever shortages, Vietnam has imported 110,000 tons of pork.
• Retail Expansion: MM Mega Market opened a massive 7,000m² facility in Hanoi, signaling a shift toward large-scale modern retail to stabilize year-end prices.

3. Outward Investment In 2019, Vietnam invested $508.14 million abroad. Notably, Australia became the top destination for Vietnamese capital, led by major livestock projects from Hoa Phat and TH Group.

Analogy: The 2019 trade landscape is like a sophisticated race car hitting its top speed; while the $500B milestone shows powerful momentum, the 456% US steel tariff serves as a sudden “speed trap” that forces domestic manufacturers to shift gears toward local raw materials.