Industry and Trade Press Review for October 23, 2018

I. Major Industry Highlights and Legal Issues

1. Debt in Failing Projects: According to a report by the Ministry of Industry and Trade (MoIT), the 12 loss-making projects within the sector currently carry a total debt of 32,000 billion VND.
2. Fuel Theft Scandal: Journalists continue to report on the “bleeding” of gasoline from Petrolimex tank trucks on the Hai Van Pass. Stolen fuel is reportedly being sold at 2,000 VND/liter cheaper than market prices.
3. Power Plant Balance: Public debate focuses on balancing economic efficiency and environmental protection, particularly regarding thermal power centers in the South. Under the Revised Power Development Plan VII, coal power capacity is projected to reach 55,300MW by 2030, raising pollution concerns in provinces like Long An.

II. Macroeconomic Outlook and Business Rankings

1. Positive GDP Growth: Prime Minister Nguyễn Xuân Phúc reported that 2018 GDP is estimated to grow by 6.7%, with average per capita income reaching $2,540.
2. Economic Restructuring: Vietnam has achieved or is on track to complete 77% of its economic restructuring targets for the 2016-2020 period.
3. Profitability Rankings: The Profit500 list for 2018 reveals that the most profitable sectors are Real Estate/Construction (14.8%), Electricity (12.8%), and Finance (11.2%).
4. Global Pessimism: Economists express concern that the US-China trade war and tightening financial conditions may trigger a global economic slowdown in 2019.

III. Energy and Industrial Performance

1. Oil and Gas: Crude oil prices rose due to investor anxiety regarding tensions between the US and Saudi Arabia.
2. Financial Disparity in Power:
   • Hua Na Hydropower reported a profit spike of 153.6 billion VND in Q3/2018.
   • Conversely, Quang Ninh Thermal Power reported a loss of 311.4 billion VND in the same period due to major equipment maintenance.
3. Project Delays: The Thuong Kon Tum Hydropower project has faced significant delays allegedly due to a lack of cooperation from a Chinese contractor, leading to a contract termination.
4. Manufacturing Shifts: In the automobile sector, Thai-made spare parts are increasingly displacing Chinese products in the Vietnamese market. Meanwhile, textile stocks saw a 21% increase in market capitalization in September.

IV. Import-Export and International Integration

1. Catfish Boom: Catfish exports to the US market in September surged by 357.6% compared to the previous year, with total annual turnover expected to reach $500 million.
2. Quality Concerns: Agricultural exports are being impacted by pesticide residue issues, which damage the reputation of Vietnamese products when shipments are returned.
3. FTA Opportunities:
   • The EVFTA (EU-Vietnam FTA) is expected to provide massive benefits for seafood, textiles, and footwear.
   • The CPTPP officially opens access to 11 economies representing 13.5% of global GDP.
4. Waste Management: Authorities are considering banning shipping lines from operating in Vietnam if they fail to re-export scrap waste containers currently stuck at ports.

V. Domestic Market and Consumer Protection

1. Market Surveillance Reform: A new MoIT circular stipulates that market surveillance officers must have a valid inspection card to issue or execute market checks.
2. Retail Competition: Local retailers are feeling the pressure from foreign giants (Japan, France, Thailand) but are using this as an opportunity to innovate and improve competitiveness.
3. Fraud and Counterfeit Goods:
   • The issue of fake Ly Son garlic has caused local prices to drop, leaving farmers with over 280 tons of unsold inventory.
   • The government warns of increasingly complex variations of illegal multi-level marketing.
4. Holiday Preparation: Hanoi’s industry and trade sector guarantees a stable supply of goods for the 2019 Lunar New Year to prevent price spikes.

Analogy: The Vietnamese retail market is currently like a local athlete in an international stadium; the arrival of global “heavyweights” from Japan and Thailand has made the competition fierce, but it is forcing the local player to train harder and adopt better strategies to stay in the race.