The New Golden Age of Trade: Navigating the Slippery Slope

11 May, 2025

According to the Ha Tinh People’s Committee, the province’s total industrial production index in April 2025 increased by 3.97% compared to the previous month and a significant 39.77% surge year-on-year. However, the cumulative growth in the first four months of 2025 only reached 2.2% compared to the same period in 2024, falling short of expectations as the province is promoting production recovery.

INDUSTRIAL PRODUCTION INDEX HINDERED BY STEEL INDUSTRY

Notably, the mining industry contributed a significant increase of 40.44%, adding 0.45 percentage points to the overall growth. The manufacturing industry witnessed a slight increase of 0.75% but contributed 0.58 percentage points due to its large proportion in the industry’s structure.

Fig. 1: Industrial production index of Ha Tinh province

However, the main bottleneck lies in the metal production sector, which plays a pivotal role in Ha Tinh’s industry. This sector recorded a 5.03% decrease compared to the previous year. The direct cause was the decline in the output of semi-finished stainless steel, which reached 1,271 thousand tons, a 5.37% drop year-on-year.

The downturn in the steel industry, particularly the Hung Nghiep Formosa Ha Tinh Steel Company, not only dragged down the overall production index but also impacted the supply chain efficiency, employment, and export turnover of the entire province.

In contrast to the challenges in the industrial sector, the trade and service sector in Ha Tinh province recorded positive progress. In April 2025, retail revenue reached VND 6,324.22 billion, up 2.84% from the previous month and 12% year-on-year. In the first four months of the year, the province’s total retail revenue reached VND 25,295.57 billion, a 10.65% increase compared to the same period in 2024.

This acceleration was partly attributed to the strong buying power during the festival season and early summer beach tourism. April coincided with several long holidays, such as the Hung Kings’ Temple Festival and the 30th of April and May Day holidays, stimulating tourism activities at famous destinations like Xuan Thanh beach, Thach Hai beach, and Thien Cam beach.

As a result, the accommodation, catering, and travel services witnessed significant growth. The revenue in this sector was estimated at VND 2,863.03 billion, a 10.4% increase year-on-year, demonstrating the effectiveness of the province’s tourism stimulation and event organization programs.

The province’s transport sector also exhibited notable growth. Transport revenue in the first four months reached VND 2,995.75 billion, a 13.28% increase. Passenger transport revenue reached VND 568.22 billion (up 7.91%), with the number of passengers exceeding 5.63 million (a 14.57% increase). Freight transport revenue reached VND 1,857.11 billion, surging 19.44% with a cargo volume of over 20 million tons.

FOREIGN TRADE DECLINES DUE TO RELIANCE ON FORMOSA

Despite the vibrant domestic production and consumption, foreign trade in Ha Tinh moved in the opposite direction. The total import and export value in the first four months of 2025 reached only USD 1,437.85 million, a 34.64% decrease compared to the same period last year.

Fig. 2: Import and export turnover of Ha Tinh province

In April 2025, export turnover reached USD 136.70 million, a 77.39% increase compared to the previous month but a 9.11% decrease year-on-year. In the first four months, exports reached USD 451.70 million, of which steel and steel billets accounted for 84.17% (USD 380.19 million) but decreased by 45.97% year-on-year. The primary reason was the impact of the steel protection policies implemented by many countries, making it difficult for Ha Tinh steel, especially from Formosa, to access traditional markets.

On the import side, the figures for April 2025 reached USD 260.50 million, a slight increase of 1.14% from the previous month but a 34.33% decrease compared to the same period last year. In the first four months, imports reached USD 986.15 million, a 30.32% decrease, mainly due to Formosa’s reduction in raw material imports. Imports from Formosa alone reached USD 790.96 million, a 22.15% decrease. These figures highlight the province’s foreign trade dependence on a large FDI enterprise.

Despite the decline in exports, Ha Tinh’s state budget revenue in the first four months of 2025 reached VND 6,615 billion, equivalent to 37% of the yearly estimate. Domestic revenue reached VND 4,100 billion, accounting for 47% of the estimate and a 24% increase compared to the same period in 2024. This result was largely due to the additional collection of value-added tax (VAT) from the Hung Nghiep Formosa Ha Tinh Steel Company and the synchronous implementation of measures to prevent budget leakage.