Vietnam Industry and Trade News Bulletin for JULY 31, 2023

A. POSITIVE ECONOMIC INDICATORS

1. Industrial Production Recovery

• IIP Growth: The Industrial Production Index (IIP) in July 2023 showed signs of recovery, increasing by 3.9% compared to the previous month and 3.7% year-on-year. Notably, the processing and manufacturing sector rose by 3.6%, while electricity production and distribution increased by 4.1%.

• Regional Performance: Several localities saw a sharp rebound in industrial activity, with Bac Ninh recording a significant 23.8% increase in its IIP for July.

• Brand Promotion: The 2023 Northern Regional Industrial and Rural Fair in Quang Ninh is highlighted as an effective “lever” for promoting local OCOP products and high-quality Vietnamese goods,.

2. Trade Surplus

• Significant Surplus: Vietnam achieved a massive trade surplus of $15.23 billion in the first seven months of 2023, a vast improvement compared to the $1.34 billion surplus in the same period last year,.

• Export-Import Values: Total trade turnover for the first seven months reached $374.23 billion, though this represents a 13.9% decrease year-on-year. July’s export turnover specifically reached $29.68 billion, up 0.8% from June,.

B. GENERAL ECONOMIC AND GLOBAL CONTEXT

• Semiconductor Crisis: The global semiconductor industry is shifting from a shortage to a surplus of inventory, leading to price drops and one of the worst downturns in history.

• Investment Capital: Realized investment capital from the State budget in the first seven months reached over 291,000 billion VND, up 22.1% compared to the previous year,.

• International Finance: The European Central Bank (ECB) remains open to two scenarios—either continuing to raise interest rates or pausing—depending on upcoming economic data.

C. ENERGY SECTOR

• EVN’s Financial Crisis: EVN continues to propose electricity price increases due to estimated losses of 51,468 billion VND for 2023. Total accumulated losses for 2022–2023 are projected to reach 78,000 billion VND, causing severe cash flow shortages for system maintenance and repairs.

• Transparency Concerns: Experts emphasize that price hikes must be accompanied by independent audits and transparent reporting on input costs to gain public consensus,.

• Global Oil Trends: World oil prices reached a 3-month high last week, driven by supply shortages and better-than-expected GDP growth in the US and Eurozone.

D. IMPORT-EXPORT AND INDUSTRY UPDATES

• India’s Export Ban: India has immediately banned the export of de-oiled rice bran (DORB), a key ingredient for animal feed. This poses a risk for Vietnamese importers, as Vietnam accounts for over 54% of India’s total export volume of this product,.

• Seafood Outlook: Although pangasius (tra fish) exports to China and Hong Kong fell by 34% in the first half of the year, experts predict a recovery in the seafood sector by year-end as inventory levels in major markets like the US and EU stabilize,.

• Rules of Origin Tool: The EU has launched a new version of the ROSA self-assessment tool to help businesses navigate origin rules in free trade agreements more easily.

E. INTEGRATION, TRADE DEFENSE, AND CONSUMER PROTECTION

1. Vietnam-Israel FTA (VIFTA)

• Effective Exploitation: As the 16th FTA for Vietnam, VIFTA offers specific mechanisms for mutual recognition of food safety standards and a streamlined 45-day approval process for export facilities,.

• Emergency Measures: The agreement allows importers to apply emergency bans for health reasons, but these must be notified in writing within two working days.

2. Trade Defense (PVTM)

• Increasing Scrutiny: Vietnamese exports face a rising risk of trade defense investigations from foreign countries.

• Business Strategy: Experts advise companies to diversify markets (“don’t put all your eggs in one basket”) and upgrade accounting software to ensure transparency during international audits,.

3. Consumer Protection and Digital Solutions

• Traceability Solution: The government launched “truyxuat.gov.vn”, a portal that allows consumers to verify product authenticity via variable QR codes to combat counterfeit goods and food safety issues,.

• Prohibited Acts: New regulations (effective July 1, 2024) strictly prohibit businesses from harassing consumers, deceiving them through misleading information, or failing to compensate for errors,.

• Legal Cases:

    ◦ Anycar: A dispute arose over a used car with a tampered odometer, raising questions about the legal liability of consignment showrooms,.

    ◦ OpenAI: The US Federal Trade Commission (FTC) is investigating ChatGPT for potential violations of consumer protection laws, specifically regarding data handling and false information (“hallucinations”),.

    ◦ Ngoc Linh Ginseng: Authorities are cracking down on the use of fake origin labels and fraudulent documents to protect the brand value of this high-priced specialty,.

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Analogy: The current industrial production is like a machine warming up after a long winter; while some components are already moving fast (like the 23.8% jump in Bac Ninh), the entire system is still finding its rhythm amidst global headwinds.