Vietnam Industry and Trade News Bulletin for May 21, 2019

A. OUTSTANDING GENERAL ECONOMIC NEWS

1. Public Debt and Finance

• Public Debt Reduction: Vietnam’s public debt ratio in 2018 fell below 60% of GDP, reaching 58.4%, the lowest in three years. On average, each Vietnamese citizen “carries” approximately 32 million VND in public debt.

• Government Debt Advances: The government advanced 97 million USD to pay off debts for the Phuong Nam Paper Mill project, as the project remains unsold and assets have not been liquidated to recover funds for the Debt Accumulation Fund.

• Corporate Finance: Binh Minh Plastic plans to pay a 25% remaining dividend for 2018 in June 2019, totaling nearly 205 billion VND.

2. Stock Market and Sector Performance

• Oil and Gas Leadership: Oil and gas stocks led the market surge, helping the VN-Index surpass the 980-point mark. This growth was driven by rising global oil prices.

• Logistics Investment: Capital is flowing heavily into the logistics sector, which is seen as a “fertile land” for potential investors and a catalyst for manufacturing businesses.

B. INDUSTRY AND TRADE NEWS

I. ENERGY (OIL, GAS, AND ELECTRICITY)

• Hydropower Planning: The Ministry of Industry and Trade (MoIT) proposed adding small-scale hydropower projects (capacity ≤ 3.0 MW) to provincial planning to tap into local potential.

• Electricity Price Transparency: MoIT requested EVN to enhance transparency in electricity pricing and promptly address customer complaints regarding billing and price application.

• Solar Power Boom: About 88 solar power plants are expected to begin commercial operation by late June 2019. However, experts warn that these projects should not over-rely on bank credit to avoid risks similar to previous BOT projects.

• International Cooperation: Oil and gas cooperation remains a highlight in Vietnam-Russia relations, emphasized during Prime Minister Nguyen Xuan Phúc’s official visit to Russia.

• Global Oil Trends: Major oil-producing countries will decide on production levels in late June after assessing the impact of US sanctions on Iran.

II. HEAVY AND LIGHT INDUSTRIES

• Loss-making Projects: 12 loss-making projects under MoIT have seen positive changes, especially in the fertilizer sector. The goal is to fully resolve all pending issues by 2020.

• TKV Labor Policy: Vietnam National Coal-Mineral Industries Holding Corporation (TKV) introduced a 2019 policy to pay incentive wages to high-skilled workers who mentor lower-skilled workers.

• Automobile Market: Some car dealerships are reportedly hiking prices or forcing customers to buy additional accessories due to scarce supply, a practice criticized for lacking transparency.

• Textile Industry Concerns: Workers in the textile and garment sector expressed opposition to increasing the retirement age, citing the physical demands of their labor.

• Social Impact: Research estimates that the annual loss due to alcohol consumption in Vietnam reaches up to 65,000 billion VND.

III. IMPORT AND EXPORT

• Trade Deficit: Vietnam recorded a trade deficit of approximately 1 billion USD in the first half of May 2019.

• Steel Imports: China remains the top supplier of steel to Vietnam, accounting for nearly 42% of total volume and 40% of total import turnover.

• Market Dynamics:

    ◦ China: Cashew exports to China surged by over 92% in volume in April 2019.

    ◦ Russia: Viewed as a promising market for Vietnamese electronics, textiles, footwear, and seafood.

    ◦ Japan: Some key exports like phones and components saw a significant decrease of 31.9% in Q1 2019.

IV. DOMESTIC MARKET AND MANAGEMENT

• Invasive Species Ban: Authorities are strictly banning the distribution of red lobsters (crayfish/tôm hùm đất) as they are an invasive species that threatens domestic agriculture and ecosystems.

• Food Safety: HCMC is tightly controlling pork supplies to prevent African Swine Fever, despite neighboring provinces reporting outbreaks.

• Vietnamese Goods Campaign: Celebrating 10 years of the “Vietnamese People Prioritize Vietnamese Goods” campaign, which has helped shift the country from a trade deficit to a surplus and maintained a 10% annual growth in retail sales.

• Personnel Updates: Several ministries, including the General Department of Market Surveillance and General Department of Customs, announced new personnel appointments and mobilizations.

V. TRADE PROMOTION AND DIGITAL ECONOMY

• Agricultural Promotion: Vietnam held forums to promote agricultural exports in Liaoning (China) and is seeking ways to expand the presence of Vietnamese goods in Thailand.

• Blockchain Technology: For the first time, 8 tons of Vietnamese mangoes were exported to the US using blockchain technology for advanced traceability.

• E-commerce: Localities like Thanh Hoa are promoting e-commerce in agriculture, with 130 facilities already participating in digital supply chain connections.

VI. TRADE DEFENSE

• Steel Safeguards: MoIT issued a decision to apply anti-evasion measures against trade defense for imported steel wire and coils.

• External Investigations: India has initiated an anti-dumping investigation into digital printing plates imported from Vietnam.