Vietnam Industry and Trade News Bulletin for JULY 19, 2017

A. Key Directives and Corporate Restructuring

1. Handling 12 Loss-Making Projects
   • Deputy Prime Minister Vuong Dinh Hue directed the Ministry of Industry and Trade (MOIT) to submit a final plan for handling 12 delayed and inefficient projects/enterprises before July 25, 2017¹¹¹¹.+1
2. PetroVietnam (PVN) Crisis Management
   • The Prime Minister’s Working Group requested PVN to prioritize resolving 5 major loss-making projects and to tighten internal discipline and personnel management during this difficult period².

B. Macroeconomics and General Economy

1. 2018 Economic Outlook
   • The Ministry of Planning and Investment forecasts GDP growth of 6.4–6.8% for 2018, with a projected budget deficit of 194.3 trillion VND (approximately 3.5% of GDP)³.
2. Vietnam as a “Rising Star” in ASEAN
   • Experts identify Vietnam as a top investment destination within the ASEAN Economic Community (AEC), driven by massive foreign investment from companies like Samsung and Canon⁴.
3. Public Debt Management Issues
   • Concerns were raised regarding overlapping responsibilities among three ministries in managing public debt, which has led to data discrepancies and delayed reporting⁵.
4. Monetary Policy
   • The State Bank of Vietnam significantly reduced interest rates for treasury bills in recent trading sessions⁶.

C. Energy and Industry Updates

1. Oil Production Warning
   • PVN’s leadership warned that domestic oil extraction could drop sharply from 13.28 million tons in 2017 to only 5–7 million tons within the next 5–7 years⁷.
2. Global Oil Market Trends
   • Despite OPEC’s efforts, global crude prices remain stagnant around $40–$48 per barrel due to high supply from U.S. shale oil and producers like Libya and Nigeria⁸.
3. Electricity for Islands
   • Vietnam Electricity (EVN) officially took over the management and operation of clean energy and lighting systems for the Truong Sa (Spratly) archipelago and DK1 platforms⁹.
4. Hydropower and Environment
   • Quang Nam: Concerns remain over the construction of four hydropower plants in areas prone to earthquakes¹⁰.
   • Incident Clarification: MOIT confirmed that recent fish deaths at the Trung Son and Pleikrong reservoirs were caused by oxygen deficiency, not water discharge or plant operations¹¹.

D. Trade and Industry Analysis

1. Import-Export Trends
   • Trade Deficit: In the first half of 2017, Vietnam’s trade deficit with South Korea reached $15.9 billion, surpassing the deficit with China ($14.1 billion)¹².
   • Footwear: Southern Vietnam continues to be the nation’s hub for footwear production, accounting for nearly 80% of the industry’s export turnover¹³.
2. Industrial Competitiveness
   • Automotive: Vietnam’s car industry is struggling to keep pace with regional neighbors like Indonesia and Cambodia as import taxes approach 0%¹⁴.
   • Steel: A surge in steel imports from India has highlighted the need for stronger trade defense policies to protect domestic production^15151515.+1

E. Domestic Market Developments

1. Preventing Fuel Fraud
   • Ho Chi Minh City authorities are sealing 3,700 gas pump meters with specialized stamps to prevent tax evasion and fuel volume manipulation¹⁶.
2. E-commerce Potential
   • Foreign investors are increasingly targeting Vietnam’s e-commerce market due to its young population, high mobile phone usage (50%), and stable economic growth¹⁷.
3. Agriculture and Livestock
   • Following a “rescue” period, pork prices have spiked again, though experts warn this volatility reflects an unsustainable, high-risk farming model¹⁸.