Vietnam Industry and Trade Press Review for July 6, 2017

I. Handling of Inefficient Projects and Debt Management

1. Reprimand of PetroVietnam (PVN) Leadership: Deputy Prime Minister Vuong Dinh Hue criticized the leadership of PVN regarding 12 delayed and inefficient projects within the industry. He noted that 75% of the capital for these projects consists of loans, and six active projects are currently reporting losses, including Ninh Binh Urea, Ha Bac Urea, and the Dung Quat Shipyard.
2. Ninh Binh Urea Debt Controversy: Vinachem proposed that the State Budget repay $162.5 million in debt to China Eximbank on its behalf for the Ninh Binh Urea project. However, the Ministry of Finance and economic experts have opposed this, arguing against creating a precedent for bailing out failing enterprises.
3. Large-Scale Financial Impact: The total debt across the 12 “frozen” projects is reported to exceed 55,000 billion VND.

II. Macroeconomics and Energy Development

1. Economic Outlook: The GDP growth target of 6.7% for 2017 remains feasible following strong performance in the first half of the year. Meanwhile, the Consumer Price Index (CPI) in June saw a slight decrease of 0.17%.
2. Power Grid Expansion: EVN has added 560 MW to the national power system in the first half of 2017. The group is also focusing on smart grid development and investing 876 billion VND to ensure electricity for industrial shrimp farming in Southern coastal provinces.
3. New Power Projects: Large-scale BOT (Build-Operate-Transfer) thermal power projects, such as Nghi Son 2 and Nam Dinh 1, have been officially licensed.

III. Industrial Performance and Manufacturing

1. Automobile Industry Growth: Vietnam and the Philippines are projected to be the fastest-growing auto manufacturing markets in Southeast Asia between 2017 and 2021. Domestic production is expected to double to 112,000 units by 2021.
2. Textile Export Challenges: While textile exports reached $14.2 billion in the first half of the year, this only represents 45% of the annual target ($31 billion) due to declining global demand and increased competition.
3. Vinacomin (TKV) Results: TKV reported a 13% increase in revenue compared to the same period in 2016, totaling 54,577 billion VND. The group is also pushing forward with state divestment and environmental protection initiatives in its coal mines.

IV. Import-Export and Domestic Market Trends

1. Agricultural Trade Dynamics:
   • Rice: Experts warn against focusing solely on quantity while neglecting quality, which could harm farmers and export acceptance.
   • Pepper: Volume increased by 18.3%, but total export value dropped by 16.8% due to lower global prices.
   • Fruit: Vietnam spent approximately 11,500 billion VND on fruit imports in six months, with Thai fruit accounting for over 8,500 billion VND of that total.
2. Domestic “Rescue” Efforts: The agricultural sector continues to face a “crisis of surplus” in the pork market, with local authorities struggling to manage the low prices and hygiene issues associated with spontaneous slaughtering.
3. Consumer Protection and Fraud:
   • Authorities destroyed nearly 300 million VND worth of counterfeit Sam Ngoc Linh in Kon Tum.
   • Warnings have been issued regarding fraudulent stainless steel imports and the need for stricter reporting from multi-level marketing firms.

Clarification: Would you like me to focus on a specific sector from this summary, such as the detailed status of the 12 loss-making projects or the latest updates on the automobile tax exemptions?