Lam, at a working session with the Central Committee’s Policy and Strategy Board discussing the gold market, asked to “shift decisively from an administrative mindset to a disciplined market-oriented mindset, from ‘tightening to control’ to ‘opening to govern’.

He also urged to “resolutely eliminate the mindset of ‘ban what cannot be managed’; and ensure the gold market operates in line with market principles under state oversight. 

In addition, he asked to “avoid rigid interventions that restrict market dynamics and advantages, while respecting people’s and businesses’ rights to property ownership and freedom to operate, and ensuring market transparency”.

These are pivotal directives, not only for the gold market but also for other markets. Nationwide conferences on Resolutions 66 and 68 have called for a shift in management mindset. 

The Party Chief’s instructions are a mandate for action following this change in thinking.

Gold monopoly

In the 2008-2012 period, Vietnam’s economy faced macroeconomic instability and high inflation, prompting people to turn to gold as a safe-haven asset. Repeated price surges and foreign currency outflows fueled economic instability.

In that context, the government issued Decree 24/2012/ND-CP to stabilize the gold market, granting the state a monopoly on gold bar production and raw gold imports for bar production, and designating SJC as the sole state-owned gold bar brand.

Since that time, Vietnam and North Korea have been the only countries maintaining a state gold monopoly. Over 13 years, this monopoly has not brought stability but created a distorted non-competitive gold market with severe economic consequences.

The price gap between domestic and global gold markets has widened, at times reaching VND20 million per tael. This has fueled gold smuggling, as shown by a detected ring smuggling 6 tons of gold worth over VND8,400 billion from Cambodia, draining foreign currency reserves abroad.

Labeling SJC as the “national gold” brand devalued other reputable gold brands (also 99.99 percent pure), harming businesses and consumers, and stifling healthy market competition.

In addition, the State Bank of Vietnam (SBV) has acted as both regulator and market player, creating a conflict of interest and weakening market regulation.

In late 2024, authorities prosecuted six individuals at SJC, including CEO Le Thuy Hang. Initial investigations revealed that they had exploited price stabilization transactions and falsified documents to misappropriate funds to gain illicit profits.

Experts believe that as long as the monopoly persists, such policy exploitation will continue, leading to a loss of resources.

Serious consequences

The Central Committee’s Policy and Strategy Board has reported several consequences: The gold market is inflexibly managed, which doesn’t align with global supply-demand developments, causing economic fallout, including gold smuggling and foreign currency drains.

The monopoly stifles competition and healthy gold trading. Policies fail to mobilize idle public resources for economic development, with people heavily investing in gold and hoarding as a valuable asset.

Management relies on outdated methods, lagging behind modern, global trading practices. 

SBV, as a regulator, not a business, is ill-suited to hold a monopoly on gold bar production under Decree 24, as gold bars are commodities.

People buying gold is a response to inflation fears and economic instability, not the cause. Fulbright University researchers noted that gold rushes in Vietnam stem from macroeconomic instability, rising global gold prices, or both.

Government reports in recent years have confirmed macroeconomic stability, making now the ideal time to revise Decree 24 to align with market-oriented principles.

Solutions 

The Party Chief mentioned nine solutions to reform gold market management.

First, refine the legal framework, urgently revise Decree 24/2012/ND-CP toward marketization with a clear roadmap and tight oversight, enhancing connectivity between domestic and global gold markets.

Second, abolish the state’s monopoly on gold bar branding in a controlled manner, allowing multiple qualified businesses to produce gold bars to foster fair competition.

Third, expand controlled import rights to increase gold supply, narrowing the domestic-global price gap.

Fourth, promote the domestic gold jewelry market to position Vietnam as a hub for high-quality jewelry production and export.

Fifth, develop attractive alternative investment channels to mobilize public gold holdings for the national economy.

Sixth, enhance inter-agency coordination in combating gold smuggling.

Seventh, the Vietnam Gold Traders Association acts as a bridge between businesses and regulators to address challenges, propose solutions, and support market stabilization measures.

Eighth, maintain macroeconomic stability and confidence in the Vietnamese dong as a fundamental, long-term solution to redirect gold resources into economic development.

Ninth, establish an information and data system for the gold market to enhance transparency.

Tu Giang