EXCERPTS:
"HANOI—Vietnam is enacting measures allowing it to slap price controls on foreign and private companies starting Oct. 1 in a move designed to contain inflation but that risks stifling business sentiment.
An official at Vietnam's Finance Ministry confirmed Thursday that the measures will go into effect Oct. 1. The orders will let the Vietnamese government intervene and impose controls if it believes that prices on a variety of items—ranging from cement and steel to sugar and rice—are moving unusually or out of step with the cost of other component goods.
So far, there is no indication Vietnam will move to control prices in the immediate future. But its frequent bouts with inflation suggest the measures might be imposed on at least some goods at some point.
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The move is likely to produce a fresh outcry among investors about state intervention. It also comes after a series of problems at state-sector companies have damaged Vietnam's reputation as one of the standout success stories in a new wave of frontier emerging markets.
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The new power to impose price controls seems designed to limit any social tensions from any further rising prices. But the downside is that Vietnam risks becoming a less attractive place to do business, strangling foreign investment, encouraging locals to invest overseas and worsening its balance of payments.
