As of December 31, 2020, 28 State-owned enterprises (SOEs) and enterprises with State capital had 131 overseas investment projects. Total capital was $6.7 billion, but 46 projects had posted losses totaling $1.17 billion.
As the restructuring of State-owned enterprises (SOEs) is one of the priorities of the government, the Prime Minister has issued Decision No. 22/2021/QD-TTg, which stimulates the speed of SOE restructuring by promulgating classification criteria and emphasizing decentralization. It is expected that some 1,500 SOEs will be restructured to 2025. Vietnam should take note of China’s approach to such restructuring, towards “grasping the large, letting go of the small”. The reason for this is the similarities in governance, with Vietnam’s Commission for the Management of State Capital at Enterprises (CMSC) and State Capital Investment Corporation (SCIC) being similar to China’s State-owned Assets Supervision and Administration Commission (SASAC). SOE restructuring in China has been quite successful in recent times thanks to the application of core strategies, including the merging of large enterprises into corporations.
The Prime Minister has issued Decision No. 22/2021/QD-TTg on allowing flexibility in the innovative re-organization of State-owned enterprises (SOEs). The Decision contains two new points. Firstly, it provides criteria for the classification of SOEs, and changes in the rate of charter capital held by the State, in which some important industries will see 100 per cent held by the State, such as high-tech applications, major investments, the field of prospecting, exploration, and development, and oil and gas exploitation. Secondly, the parent company, the representative of State capital, and the owner’s representative agency will be able to proactively classify SOEs according to announced criteria, and at the same time develop a restructuring plan based on an evaluation of business performance.
The Asian Development Bank (ADB) has approved $4.6 million worth of technical assistance (including $2.7 million from the Canadian Government and $1.9 million from the Australian Government) to help Vietnam strengthen public-private partnerships (PPPs) and private sector development while innovating State-owned enterprises (SOEs).
