Overview of Industry and Trade News June 29, 2017
This report highlights Vietnam’s economic performance in the first half of 2017, emphasizing robust FDI attraction, challenges in sustainable agriculture, energy transitions, and significant policy reforms aimed at protecting consumers.
1. Macroeconomic Performance & Investment
- GDP Growth: The General Statistics Office announced that the GDP for the first half of 2017 grew by approximately 5.73%.
- FDI Attraction: Vietnam attracted $19.22 billion in Foreign Direct Investment (FDI) during the first six months, a significant increase of 54.8% compared to the same period in 2016.
- SOE Restructuring: Experts emphasize that restructuring State-Owned Enterprises (SOEs) must become more decisive and practical to drive economic growth, rather than just meeting initial expectations.
- Tax Evasion: Authorities reported that 22 businesses disappeared after being audited, leaving behind 128 billion VND in unpaid taxes.
2. Import-Export & Agricultural Challenges
- Export Strength: The top 10 export groups (including phones, textiles, and computers) accounted for nearly 72% of total turnover. Total agro-forestry-fishery exports reached $17.1 billion (up 13.1%).
- Sustainability Issues: Despite high export volumes, “rescuing” unsold agricultural products (such as pork and peanuts) remains a hot topic.
- Market Barriers: Taiwan recently rejected 25 tons of Vietnamese black pepper due to excessive pesticide residues.
- Branding: Experts from the Netherlands noted that while Vietnam is a top supplier of food products, many global consumers do not recognize Vietnamese brands.
3. Energy & Petroleum Sector
- CPI Impact: The Consumer Price Index (CPI) in June decreased by 0.17%, primarily driven by falling gasoline prices.
- Biofuel Transition: Vietnam is preparing to replace RON 92 gasoline entirely with E5 biofuel starting January 1, 2018.
- Power Transmission: The National Power Transmission Corporation (EVNNPT) is seeking loans without government guarantees for major projects, such as the 500 kV Van Phong – Vinh Tan line, estimated at 2,800 billion VND.
- Coal vs. Environment: While coal power is essential for energy security, there are growing concerns about air pollution in Hanoi caused by surrounding thermal power plants.
4. Industrial & Policy Reforms
- Textile Opportunities: The EU’s acceptance of “cumulation of origin” rules in the EVFTA is expected to open significant doors for Vietnamese garments to enter the European market.
- Automobile Taxes: Although import taxes on cars from ASEAN will drop to 0% in 2018, experts warn that car prices may not decrease as much as consumers expect.
- Combating “Fake” Promotions: The Ministry of Industry and Trade is amending Decree 37 to stop fraudulent commercial promotions, such as “virtual” prizes that consumers never actually win.
