Vietnam Industry and Trade News Bulletin for April 25, 2022

A. OUTSTANDING INDUSTRY AND ENVIRONMENTAL NEWS

1. Hazardous Waste Scandal at Dien Quang Lamp Factory

• Discovery of Illegal Burial: Authorities in Dong Nai province discovered over 42 tons of hazardous waste buried at the Dien Quang Lamp Factory.

• Waste Composition: The waste includes more than 27 tons of glass fragments contaminated with hazardous substances buried in the yard and nearly 15 tons of wastewater hidden in a concrete cellar.

• Toxicity Levels: Rapid tests showed that the wastewater’s pH exceeded limits by 7 times, while the lamp shells contained mercury and sulfur.

• Legal Action: Authorities are expanding the investigation and have handed over the waste to a specialized unit for proper disposal.

B. IMPORT AND EXPORT NEWS

1. Sectoral Performance and Market Trends

• Seafood Success: Major seafood enterprises are targeting high profits in 2022 due to favorable exports. Pangasius exports are expected to grow by 80%, and shrimp by 20%. The Vietnam-EU online trade conference 2022 aims to further connect products to the $50 billion EU market.

• Medical Equipment Decline: Medical mask exports in Q1 2022 dropped significantly by 68.6% compared to the same period in 2021.

• Sand Export Discrepancies: UN data reveals a massive gap (3.3 times) between Vietnam’s reported sand export turnover (212million)andtheglobalreportedimportofVietnamesesand(705 million) from 2011 to 2020.

• Agricultural Challenges:

    ◦ Coconuts: Exports fell by over 50% due to high shipping costs (up 3-6 times) and technical barriers in the US and Chinese markets.

    ◦ Cassava: The industry remains 90% dependent on China, facing risks from new Chinese quality standards and competition from Thailand.

    ◦ Sturgeon: Domestic farmers are struggling against cheap Chinese sturgeon imports that are difficult to trace and potentially hybrid species.

2. Regional and International Trade Policies

• Indonesia’s Cooking Oil Ban: Indonesia announced a ban on crude palm oil and cooking oil exports starting April 28 to stabilize domestic prices. This move is expected to worsen global food inflation, as Indonesia provides 60% of the world’s palm oil.

• Border Trade Resumption: Key border crossings in Lạng Sơn (Huu Nghi, Chi Ma, Tan Thanh) and Quảng Ninh (Bac Luan 2) have resumed or are preparing to resume goods clearance with China.

• UKVFTA and Trade Defense: Businesses are urged to monitor early warning systems as trade defense cases (anti-dumping, safeguards) between Vietnam and the UK are expected to rise.

C. ENERGY AND MINERALS

1. National Planning and Regulation

• Power Plan VIII: The Ministry of Industry and Trade (MoIT) is finalizing the draft Power Plan VIII for submission to the Government in April 2022. The plan focuses on regional balance and market-based development.

• Mineral Strategy: A new appraisal council, chaired by the Deputy Prime Minister, was established to oversee the 2021-2030 mineral exploration and processing plan.

• Gasoline Tax Proposal: The Ministry of Finance proposed reducing the MFN import tax on gasoline from 20% to 12% to diversify supply sources and reduce dependence on traditional partners like ASEAN and South Korea.

2. Corporate and Project Updates

• Coal Supply: TKV and EVN signed an agreement to ensure coal for power generation. TKV commits to supplying 5.1 million tons of coal in Q2 2022 to meet peak summer demand.

• Renewable Energy Milestones:

    ◦ Inauguration of the 75MW Tan Thuan Wind Power Plant in Ca Mau.

    ◦ Inauguration of the 49.5MWp Dohwa Le Thuy Solar Power Plant in Quang Binh (an FDI project from South Korea).

• International Gas Market: The EU issued guidance allowing companies to pay for Russian gas in Euros/USD which are then converted to Rubles without violating sanctions, provided specific contractual declarations are made.

D. DOMESTIC MARKET, POLICY, AND LEGISLATION

1. Economic Evaluation and Outlook

• 2021 Retrospective: Vietnam’s 2021 GDP growth was 2.58%, the lowest in two decades due to the Delta variant.

• 2022 Prospects: Experts target 6-6.5% growth, driven by recovery packages and digital economy growth, though inflation and high oil prices remain risks.

• Financial Audit: In 2021, inspectors recommended recovering 17.8 trillion VND for the state budget after discovering numerous economic violations.

2. Market Management and Consumer Protection

• Digital and Circular Economy: Ho Chi Minh City is promoting a roadmap to integrate the digital economy into every citizen’s life and transitioning from a linear to a circular economy using technology.

• OCOP and Local Brands: Localities like Trieu Son (Thanh Hoa) and Bac Giang are focusing on upgrading OCOP (One Commune One Product) quality and value chains.

• Legal Revisions:

    ◦ Consumer Protection: The draft Law on Consumer Protection (amended) includes new rights for consumers to request state support during negotiations with businesses.

    ◦ Multi-level Marketing (MLM): New regulations are being drafted to tighten MLM knowledge testing and management.

    ◦ EU DSA Law: The EU passed the Digital Services Act (DSA) to force Big Tech (Google, Meta, TikTok) to monitor illegal content more strictly.

3. Investment and M&A

• Industrial Real Estate: Continued growth in Q1 2022 with rising land prices and a shift toward “green” industrial parks.

• Real Estate M&A: Activity is picking up as developers seek to increase land banks for the post-pandemic recovery.

4. Tax and Social Policy

• Sin Taxes: The 2030 Tax Reform Strategy includes a roadmap to increase taxes on tobacco, beer, and alcohol to limit consumption and protect public health.