Industry and Trade News Review dated 28 May 2018

A. STATE MANAGEMENT AND SOE REFORM

1. State-Owned Enterprise (SOE) Governance: Minister of Industry and Trade Tran Tuan Anh highlighted a major conflict of interest where ministries act as both state managers and owners of enterprises (“playing football while blowing the whistle”),. He argued this dual role causes inefficiency, lack of autonomy, and responsibility avoidance, suggesting that separating these functions via the Committee for State Capital Management is essential,,.
2. Public Land Mismanagement: The Government Inspectorate recommended recovering a “golden land” site at 8-12 Le Duan, Ho Chi Minh City. Four MOIT-affiliated companies allegedly acted dishonestly to secure priority rights to the 5,000 sqm site, then transferred development rights to a private partner (Kido) to profit 200 billion VND without contributing capital,,.
3. Equitisation Challenges: While the Ministry of Transport reported successful equitisation with increased profits for 18 corporations, National Assembly delegates criticised the overall slow pace and lack of transparency,,. Only three out of 85 targeted enterprises were equitised in Q1 2018 due to ministries being reluctant to relinquish “backyard” companies,.
4. Fiscal Policy: The Ministry of Finance confirmed it will not increase VAT to 12% (maintaining it at 10%) but is researching a potential property tax. Additionally, the Petrol Price Stabilisation Fund recorded a surplus of over 4,526 billion VND by the end of Q1 2018.
5. Economic Planning: The government has decided not to increase crude oil extraction to boost GDP, focusing instead on processing, manufacturing, and services to drive growth.

B. INDUSTRY AND ENERGY

1. Fertiliser Milestone: Ca Mau Fertilizer Plant reached a production milestone of 5 million tonnes of urea after seven years, meeting 40% of domestic demand.
2. Petroleum Services: PVN Technical Services Corporation (PVS) targets lower revenue and profit for 2018 (down 42% and 28% respectively) despite rising oil prices, citing a difficult domestic and regional outlook.
3. Sector Acquisition: The plastics industry faces intense M&A pressure, with major Vietnamese firms being acquired by Thai, Korean, and Japanese investors, raising concerns about domestic market dominance.
4. Textile Standards: From 1 May 2018, textile products must announce conformity with the national technical regulation QCVN 01:2017/BCT before entering the market.
5. Construction Materials: Domestic construction glass (up to 19mm thickness) is successfully replacing imports and smuggling due to competitive pricing and quality.

C. EXPORT-IMPORT AND INTERNATIONAL TRADE

1. Rice Exports: Export prices for 5% broken rice hit a four-year high at 460–465 USD/tonne. The Philippines may need to import up to 1.4 million tonnes this year, signalling strong demand.
2. Automotive Imports: Imports of CBU cars surged, with 939 units arriving in a single week—a fourfold increase—dominated by Thai-origin vehicles (86.4%),.
3. Trade Defence: The Vietnam Steel Association warned exporters to strictly comply with origin rules to avoid anti-dumping suits, specifically regarding the use of Chinese raw materials. Meanwhile, the US threat of a 25% tariff on auto imports poses risks to the global industry.
4. Coal Exports: Coal exports to South Korea quadrupled in volume during the first four months of 2018 compared to the same period last year.
5. Agricultural Targets: The agricultural sector is projected to achieve an export turnover exceeding 40 billion USD and a trade surplus of over 9 billion USD in 2018.

D. DOMESTIC MARKET AND AGRICULTURE

1. New Promotion Rules: Under Decree 81/2018/NĐ-CP, effective 15 July 2018, businesses will be allowed to offer discounts of up to 100% of the product value, removing the previous 50% cap.
2. Commodity Prices:
   • Pork: Prices spiked to 50,000 VND/kg in some areas, though authorities label this as exceptional rather than the norm.
   • Lychee: Early harvest prices plummeted from 50,000 VND/kg to as low as 16,000 VND/kg within a week.
   • Sugar: Domestic sugar faces severe competition from Chinese liquid sugar (importing at 0% tax), prompting calls for a 10–20% tariff.
3. Retail Trends: Foreign retailers are expanding via different strategies: Thai and Korean firms prefer M&A, while Japanese investors focus on building their own shopping centres.
4. Media Costs: Print newspapers are facing difficulties as paper prices increased by 7.5–9.4% between April and May.

E. CONSUMER PROTECTION AND SOCIETY

1. Cryptocurrency Fraud: The Ministry of Public Security is investigating the Modern Tech company regarding the iFan cryptocurrency scandal, which allegedly defrauded investors of 15 trillion VND.
2. Product Safety: Police tests on “cannabis lollipops” sold online found no narcotics, but authorities are urging stricter controls on “hand-carried” food and drug imports.
3. Multi-Level Marketing (MLM): The number of participants in MLM schemes rose by 11% in 2017, reaching over 700,000 people.