Vietnam Industry and Trade News Bulletin for JULY 18, 2017
A. EXPORT AND IMPORT CHALLENGES
1. Regulatory Compliance and Risks
- Knowledge Gap: Vietnamese agricultural and aquatic exporters are facing increased risks of product rejection or destruction due to a lack of understanding regarding foreign laws, particularly stringent U.S. market regulations.
- Chemical Bans: Hundreds of business codes have been revoked as firms continue to use substances banned globally, despite being permitted under domestic “transition periods.”
2. Specific Commodity Shifts
- Pangasius (Tra Fish) Re-inspection: Starting September 1, 2017, all Vietnamese pangasius exported to the U.S. will be subject to strict USDA re-inspection. This includes rigorous checks on certification, labeling, storage conditions, and volume.
- Rice Export Reform: The Vietnam Chamber of Commerce and Industry (VCCI) is officially lobbying for the simplification of rice export procedures, arguing that current administrative requirements are hindering international competitiveness.
B. ENERGY AND HEAVY INDUSTRY
1. PVN Financial Performance
- H1 Profit Surge: The Vietnam National Oil and Gas Group (PVN) reported a post-tax profit of over 13,100 billion VND for the first half of 2017. This 15% surplus over targets was largely driven by average crude oil prices hitting 54.4 USD/barrel.
2. Infrastructure and Policy Shifts
- Quang Nam Hydropower Debate: Controversy surrounds four proposed projects in Quang Nam. While local leaders claim minimal impact due to “run-of-river” designs, public concerns persist regarding potential earthquakes and environmental degradation.
- Nuclear to LNG/Coal Pivot: Following the cancellation of the Ninh Thuan nuclear project, the government has announced a strategy to fill the energy gap with modern coal-fired thermal power and liquefied natural gas (LNG) plants by 2030.
- Digital Billing: Hanoi and parts of Ho Chi Minh City have officially terminated door-to-door electricity bill collection, transitioning all payments to digital platforms and authorized collection points.
3. Automotive Strategy
- Hyundai ASEAN Hub: Hyundai Motor has designated the Vietnam-assembled Grand i10 as its strategic model for expansion into the wider ASEAN market.
C. DOMESTIC MARKET AND TRADE PROMOTION
1. Market Integrity and Safety
- Smuggling Crackdown: HCMC authorities intercepted a massive smuggling operation in District 7, discovering the largest-ever warehouse of illicit eyewear.
- “Fake Rice” Rumors: Officials in Dong Thap province have officially debunked rumors of “fake rice,” clarifying that recent viral reports were inaccurate and posed a threat to public order.
2. Exhibitions and Consumer Trends
- Leather & Shoe Industry: The 19th International Shoes & Leather Exhibition opened in Ho Chi Minh City, hosting over 700 manufacturers from 27 different countries.
- Luxury Consumer Demand: Despite a price tag ten times higher than local alternatives (350,000 VND per pack of 10), South Korean smoked eggs are currently witnessing a surge in demand among high-end Vietnamese consumers.
Analogy: The Vietnamese export sector is like a professional athlete entering a world-class stadium; while the “strength” (production volume) is there, the athlete must now master the “technical rules” (international regulations) to avoid being disqualified from the biggest games in the U.S. and EU.
