Vietnam Industry and Trade News Bulletin for OCTOBER 25, 2018
1. Legal and Noteworthy News
- Fake Official Scam: Police are searching for victims of a fraud case involving a man posing as a MoIT official to collect money for fake APEC cards.
- Petrolimex Theft Case: MoIT issued an urgent order for Petrolimex to investigate and handle reports of drivers stealing gasoline on Hai Van Pass. Consequently, several tank truck drivers have been suspended.
2. General Economy and National Assembly
- Profit500 Ranking: The 2018 list of the 500 most profitable enterprises in Vietnam highlights the dominance of sectors such as real estate/construction (14.8%), electricity (12.8%), and finance (11.2%).
- Price Management Reform: Experts are calling for the removal of administrative commands in price management, noting that rigid price stabilization efforts often fail to keep pace with market supply and demand.
- National Assembly Updates: Delegates discussed solutions for sustainable development and expressed concerns over public investment capital allocation and budget shortfalls in the State-owned and FDI sectors. Additionally, the National Assembly held confidence votes for 48 key positions.
3. Energy and Petroleum
- Renewable Energy Investment: The Central Power Corporation (EVNCPC) is investing 1,372 billion VND in a 50MW solar power plant in Khanh Hoa province.
- Oil and Gas Trends: While global oil prices showed a slight downward trend recently, the overall increase in WTI and Brent prices since the start of the year has significantly impacted corporate profits.
- Regional Projects: An Italian group (Eni) won exploration rights in Mozambique, and a consortium including Samsung Engineering won a clean fuel project in Thailand.
4. Industry and Trade War Impacts
- Production Shifts: Due to the US-China trade war, brands like Brooks Running are considering moving production from China to Vietnam. Experts suggest Vietnamese suitcases, bags, and wooden furniture have a major opportunity to replace Chinese goods in the US market.
- Technical and Trade Barriers: There are warnings regarding “transshipment” risks, where Chinese agricultural products might be labeled as Vietnamese to bypass US taxes. Similarly, the surge in Vietnamese tire exports following EU anti-dumping duties on China may trigger trade defense investigations against Vietnam.
- Raw Material Shortages: Despite contributing 1.5% to the GDP, the paper industry is struggling with a severe lack of production materials.
5. Import-Export and Market Integration
- US Trade Surplus: In the first nine months of 2018, Vietnam’s exports to the US reached $35.02 billion (up 13.2%), with two agricultural groups exceeding $1 billion in value.
- Catfish Boom: Exports of tra fish (catfish) to the US surged, contributing to a total sector export value of $1.59 billion as of September 2018.
- FTA Utilization: Although Vietnam has 16 signed or negotiated FTAs, the current utilization rate of these preferences is only 40%.
- CPTPP Ratification: MoIT is preparing a report for the National Assembly regarding the ratification of the CPTPP agreement.
6. Domestic Market and Consumer Protection
- Price Volatility: After reaching record highs, pork prices have begun to decrease in both Northern and Southern provinces.
- ASEAN Competition: There are growing concerns that Vietnamese goods are losing ground in the ASEAN market due to the dominance of foreign distribution channels and better-suited products from Thailand and South Korea.
- Retail Trends: “Multi-channel commerce” is identified as the essential new trend for modern retail to remain competitive.
7. Corporate Information
- PVN: The Vietnam Oil and Gas Group predicts a 10% annual decline in oil output until 2025 due to aging wells and low new reserves.
- Petrolimex: The Price Stabilization Fund (BOG) balance reached over 3,040 billion VND by the end of September.
- Vinacomin: The group plans to collect 286 billion VND from auctioning shares in two subsidiaries.
- EVN: Southern Vietnam has reached an electricity coverage rate of 99.62% of households.
Analogy: The Vietnamese export sector during the US-China trade war is like a surfer on a rising tide; it offers a powerful lift (increased market share in the US), but requires great skill and caution to avoid the “crashing waves” of trade defense investigations and transshipment fraud.
