Vietnam Industry and Trade News Bulletin for MAY 30, 2018
A. OUTSTANDING GENERAL ECONOMIC NEWS
1. Taxation and Price Management
• Fuel Environmental Tax: The Ministry of Finance proposed increasing the environmental tax on gasoline to a ceiling of 4,000 VND/liter. Experts suggest that Vietnam should ensure transparency in tax spending and consider the Singaporean model of taxing specific vehicle types to avoid public backlash.
• Price Control and Inflation: Deputy Prime Minister Vuong Dinh Hue affirmed that there will be no electricity price increase in 2018. The goal is to keep the Consumer Price Index (CPI) below 4% by harmonizing petrol price adjustments and using the Price Stabilization Fund effectively.
2. Supporting Industry and SOE Management
• Supporting Industries: Many Vietnamese enterprises have significantly improved their productivity and management through the consultant training program organized by Samsung and the Ministry of Industry and Trade (MoIT).
• SOE Reform: The Minister of Industry and Trade admitted to a conflict of interest (“playing the ball and blowing the whistle”) in managing State-Owned Enterprises (SOEs), where policies were both proposed and implemented by the same entities.
• Petrolimex Violations: The Government Inspectorate is tracing the responsibility of the Ministry of Finance regarding unresolved violations at Petrolimex.
B. NATIONAL ASSEMBLY NEWS
1. Oversight of Inefficient Projects
• Minister Tran Tuân Anh reported to the National Assembly on the plan to handle 12 loss-making projects. The goal is to resolve major issues by the end of 2018 and all remaining problems by 2020.
C. INDUSTRY AND TRADE NEWS
I. ENERGY (OIL, GAS, AND ELECTRICITY)
• Oil Prices: WTI crude oil prices continued to decline due to concerns over increased supply from Saudi Arabia and Russia,.
• Major Projects:
◦ The Nghi Son Refinery successfully launched its first batch of RON 92 gasoline, contributing to national energy security.
◦ Thailand’s SCG Group signed a contract to acquire the remaining 29% stake in the Long Son Petrochemical project, gaining 100% ownership.
• Infrastructure and Services: The 500 kV transmission system was officially added to the list of important works related to national security. A new regulation allows renters to sign electricity purchase contracts directly if they have temporary residence for 12 months or more.
II. HEAVY AND LIGHT INDUSTRIES
• Automobile Market: Toyota Vietnam plans to expand production to 90,000 vehicles/year. Honda’s leadership promised to bring scooter prices closer to the manufacturer’s suggested retail price. Meanwhile, China’s reduction of import taxes has led many car manufacturers there to lower prices.
• Alcohol Law Debate: The Ministry of Health and businesses are in a dispute over the Draft Law on Prevention and Control of Alcohol Harm, specifically regarding data on alcohol consumption per capita.
• Waste Management: Cat Lai and Hiep Phuoc ports stopped receiving plastic scrap containers starting June 1, 2018, due to high inventory levels.
III. IMPORT AND EXPORT
• Trade Defense: Vietnam is currently facing 128 trade defense cases (including anti-dumping and anti-subsidy) initiated by 17 countries. Businesses are urged to improve their legal knowledge and origin transparency to protect their export value,.
• Agricultural and Aquatic Exports:
◦ There are suspicions that China is buying Vietnamese pangasius to resell to the US market at higher prices.
◦ Tan Long Group won a contract to export 50,000 tons of Japonica rice to South Korea,.
◦ Yarn and fiber exports to the US are growing strongly, with a target of 3.9 billion USD in 2018.
◦ Total agricultural, forestry, and fishery export turnover reached 15.6 billion USD in the first five months of 2018.
• Resource Inspection: A joint delegation from the Ministries of Construction, Industry and Trade, and Natural Resources will inspect the export of silica and molding sand in several provinces.
IV. DOMESTIC MARKET AND MANAGEMENT
• Market Fluctuations:
◦ Live pig prices surged unusually, leading to concerns about price manipulation by large players.
◦ Fruit prices (watermelon, mango, etc.) dropped significantly as the harvest season peaked,.
◦ Sugarcane farmers are switching to cassava because sugar prices have fallen below production costs due to smuggled Thai sugar,.
• Campaigns: Localities like Hung Yen are holding trade fairs to connect supply and demand for agricultural products.
V. TRADE PROMOTION, INTEGRATION, AND CONSUMER PROTECTION
• High-value Exports: Hung Yen’s specialty longans reached a price of 200,000 VND/kg when exported to the US.
• Bilateral Trade: Vietnam aims to reach a 100 billion USD trade turnover with South Korea by 2020.
• Consumer Protection: MoIT confirmed that Mumuso has not been licensed for commercial franchising in Vietnam, raising concerns about its origin and quality.
• Legal Integration: Decree 63/2018/NĐ-CP on Public-Private Partnerships (PPP) was issued to simplify procedures and increase transparency. The Vietnam Mediation Center (VMC) was launched to resolve commercial disputes.
