Economic tidbits: mobility

Lots of short news bits that I feel are important but not enough for a full post:

Source: Apple

1) People are back to moving in Vietnam. Apple provides mobility data for a large number of countries and cities, including Vietnam. You can see in the chart to the right that people are moving again. It had fallen to 40% of the baseline (a date in early January), and now it has gone back up.

Source: Google

This rhymes with what Google is seeing as well. Google provides a bit more granularity, and we can see that workplaces are seeing returned movement, but retail/recreation and parks are not. Transit has also not recovered compared to the baseline.

So things are not completely back to normal, even if most restrictions have been lifted. People are clearly not comfortable to go back to bars, restaurants, stores and parks at the level they were pre-COVID. This is similar to what we are seeing in China, which also has returned somewhat to normal.

I think we will see an impact on retail landlords - here’s looking at you, Vincom (owned by Vingroup).

As mobility returns, Vietnam is starting to import more gasoline.

Vietnam's state-owned Petrolimex has issued a tender to buy gasoline amid easing travel restrictions in the country. Petrolimex is seeking about 105,000-120,000t (0.89mn-1.01mn bl) of gasoline for delivery during May and June.

March imports were the lowest level since January 2017.

2) The US can now export sorghum to Vietnam. This article goes into the details. For some reason, the US did not have an acceptable pest risk assessment for the Vietnamese government. Remember when thinking about trade and trade deals that most of the actual impediments to trade are no longer tariffs and such. Sometimes those are there. But more and more (especially as trade moves from merchadise to services), regulations are more important.

The crazy thing is that this has taken 5 years (!), meanwhile the US has been pushing to increase exports the whole time. But it still took 5 years. And it looks like Vietnamese buyers are interested.

Sorghum is attractive to Vietnamese buyers seeking to diversify their sources of energy in feed and find feed sources that store better in local climates. Sorghum is gluten-free and non-biotech, which is also attractive to niche sectors in Vietnam, including the pet food industry.

I doubt this will do much to the trade deficit, but it might get Vietnam a little bit more goodwill with the trade negotiators.

3) Don’t expect more competition in the airline industry. According to this article, the government will not allow new airlines to be established. Vietnam is already fairly competitive, and airports are pretty crowded (at least pre-COVID). Right now, very few people are flying, especially long-haul international flights where a lot of the money is made. And the decline has been percipitous:

[T]he number of arrivals this year is expected to fall by 43% on the year, according to a Transport Ministry report in April.

It is going to take some time before passengers get back aboard. Vietnam won’t even open up for international flights until June 1, and the 2-week quarantine will likely remain in force for a while. That is going to stop all but the most determined traveler.

Looking beyond airlines, I wonder if we will see more of this sort of soft help for incumbents. All existing companies are hurting, but it doesn’t make sense to protect them forever. Will we see a return to normalcy next year, and will that mean more businesses are able to get licenses? Or will it take even longer? These are going to be difficult calculations, especially because incumbents are going to lobby hard to keep their preferences.