Vietnam Industry and Trade News Bulletin for JUNE 21, 2017
A. OUTSTANDING ECONOMIC AND INDUSTRY ISSUES
1. Handling Inefficient Projects in the Industry and Trade Sector
• Politburo Direction: The Politburo, chaired by General Secretary Nguyen Phu Trong, met to provide guidance on handling delayed and inefficient projects within the Ministry of Industry and Trade (MoIT).
• Accountability: The meeting emphasized the need to clarify violations in each weak project and enterprise, viewing these failures as a “costly lesson” in managing State resources.
• Action Plan: The Government and MoIT are tasked with urgently implementing solutions to resolve these backlogs with the highest efficiency.
2. Economic Growth and Forecasts
• GDP Targets: The Government remains determined to achieve a 6.7% GDP growth target for 2017, focusing on sustainable quality rather than just figures.
• Regional Performance: Quang Ninh province recorded its highest economic growth in five years during the first half of 2017, with a positive shift toward the service sector.
• Risk and Optimism: While HSBC views Vietnam’s manufacturing sector as a strong foundation for continued growth, ICAEW warns of lingering risks in the economy.
B. NATIONAL ASSEMBLY NEWS
1. Conclusion of the 3rd Session (XIV National Assembly)
• Legislative Results: The National Assembly officially closed its month-long session after passing 13 laws and 5 resolutions.
• Key Approvals: Notable approvals include the Law on Management and Use of State Assets (amended) and a specialized Resolution on handling bad debts of credit institutions.
2. Oversight and Resolutions
• Food Safety: A resolution was passed to strengthen policies and laws regarding food safety for the 2016–2020 period.
• State Capital Management: The Assembly established a monitoring group to oversee the management and use of state capital and assets at enterprises, as well as the equitization process from 2011 to 2016.
C. INDUSTRY AND TRADE NEWS
I. ENERGY (OIL, GAS, AND ELECTRICITY)
• Renewable Energy Trends: Bloomberg forecasts that renewable energy (wind and solar) will generate 34% of global electricity by 2040, potentially “killing off” coal production faster than expected.
• Oil & Gas Production: The BK-TNG platform at Thien Ung field produced over 54 million m3 of gas and 10,000 m3 of condensate in the first six months of operation, valued at $18 million.
• Hydropower Milestones:
◦ The fourth and final unit of the Trung Son Hydropower Plant was successfully integrated into the national grid.
◦ The Thuan Hoa Hydropower Plant (38 MW) in Ha Giang was inaugurated after three years of construction, with a total investment of nearly 1,300 billion VND.
II. MANUFACTURING AND SUPPORTING INDUSTRIES
• Textile Industry Challenges: Vinatex is focusing on production and exports in the post-TPP era. However, the industry faces severe “bottlenecks” in supporting industries, specifically in dyeing and the production of small components like needles and threads.
• Electronics Supply Chain: Samsung Vietnam is increasing its support for Vietnamese firms to produce complex components; currently, 215 Vietnamese enterprises are part of Samsung’s supply chain (25 Tier-1 and 190 Tier-2 suppliers).
• Automotive Market: High taxes and fees continue to keep car prices in Vietnam elevated, neutralizing the benefits of reduced import tariffs.
III. IMPORT AND EXPORT
• Trade Balance: By mid-June 2017, Vietnam’s total import-export turnover reached $179.84 billion, a 21.5% increase year-on-year. The country faced a trade deficit of $2.8 billion.
• Administrative Procedures: There are currently 242 administrative procedures and policies regulating import and export activities.
• Rice Exports: The Vietnam Food Association (VFA) now allows all enterprises to sign commercial contracts in centralized markets, removing the previous monopoly concerns.
• Auto Imports: The number of imported CBU (Completely Built-Up) vehicles continued to decline in the first half of June.
IV. DOMESTIC MARKET AND TRADE PROMOTION
• Agricultural Crises: Pumpkin prices in Binh Phuoc and Gia Lai crashed significantly, leaving farmers in distress and requiring media-led “rescue” efforts.
• Taxi Competition: Vinasun has called for an end to “ultra-cheap” promotions by Uber and Grab, citing unfair policy advantages.
• Promotion Regulations: MoIT held a workshop in Da Nang to gather feedback on amending Decree 37/2006/ND-CP regarding trade promotion activities.
V. CORPORATE UPDATES
• Dung Quat Refinery (BSR): After 7 years, the refinery has achieved total revenue of over $36 billion and contributed $7 billion to the State budget, doubling its initial investment.
• PV Power NT2: The Nhon Trach 2 Petroleum Power Joint Stock Company celebrated its 10th anniversary, maintaining a strong position in the power industry
