Vietnam-China Trade Targets US$10Bln

Vietnam-China Trade Targets US$10Bln

The seminar on “Intensified Vietnam-China Economic and Trade Relations” was sponsored by VCCI and the Chinese Embassy in Hanoi on September 23, 2004. It marked a closer relationship between the neighbouring countries. VCCI President Vu Tien Loc and Chinese Ambassador Qi Jianguo launched a commerce website: Vietnam - China Business Link.

Mr. Tran Duc Minh, Vice Minister of Trade said that trade relations between Vietnam and China have been recording high growth. In 2003, two-way trade turnover was US$1.87 billion, up 33.27 per cent over 2002. In the first 7 months of 2004, two-way trade value was $3,749 million, or 39.32 per cent over the same period last year, making China the premier trading partner of Vietnam .  Mr. Minh also believed that Vietnam-China trade will exceed the target set by the two Prime Ministers of US$5 billion by 2005.

According to experts, the fast growth of bilateral economic co-operation is largely due to improvements in the business environment and policies of the two nations. Businesses in both countries have made the best use of available opportunities to increase their trade and investment. For its part, the Vietnamese government has issued Decree 46/2001/QD-TTg on import and export activities together with the guidance of relevant ministries and agencies, constituting a complete legal framework. The government has also encouraged and assisted businesses to promote bilateral trade.

Under the framework of the ASEAN-China programme, from October 1, 2004, Vietnam will receive preferential treatment on taxes regarding agricultural aquatic products. When the ASEAN• China free trade area is established, economic and trade relations between China and Vietnam will greatly develop.

The trade agreement signed between the two countries and related guidelines on its implementation have created a legal foundation for stable and healthy trade. Provinces on both sides of the border have also contributed to the growth of bilateral economic and trade relations.

Mr. Minh added that to increase bilateral trade, the two countries must encourage large enterprises to sign long-term contracts on major products such as rubber, fruit and vegetables, aqua-products, coal, crude oil, wooden furniture (from Vietnam), and petroleum, steel, machines and equipment (from China). Contractual cooperation can also be made in the processing industry, and materials for garment and footwear to export to other nations.

With these considerations being met, experts are of the opinion that two-way trade between Vietnam and China will hit US$10 billion by 2010.

Deputy Prime Minister Vu Khoan:

US$10Bln target feasible

Vietnam-China economic and trade relations play an important role in bilateral cooperation. In the early 1990s, the two-way trade value was only US$30 million, by 2003 it increased to US$4.87 billion, and today China ranks fourth among Vietnamese partners. Therefore the target of US$5 billion by 2005 is realistic and achievable. China is helping Vietnam to restore and expand several metallurgy and chemical plants. Chinese enterprises have participated in many infrastructure and power projects and nearly 300 joint ventures in Vietnam . Vietnamese enterprises have also made some investments in China . The two countries have developed their multilateral cooperation in APEC, ASEM, and especially in ASEAN + 1 or + 3.

The next immediate target is to increase the two-way trade value to US$10 billion in the next 5-7 years, reducing trade deficit and increasing manufacturing cooperation. I believe that we are quite capable of achieving that target, even more so than any other countries in the region. Vietnam and China have favourable conditions to assist their increased cooperation: common borders, a long-standing friendship, similar cultures, socialist construction, and both nations are in the process of management transformation and international economic integration.

Mr. Yu Xiaodong, Head of Economic Information Department, Chinese Commission for Promotion of International Trade (CCPIT):

Vietnam-China traditional economic cooperation has changed since China has joined the WTO and established the China-ASEAN free trade area. Bilateral cooperation has broadened in scope and offers brighter prospects for both countries in terms of new opportunities and challenges.

Vietnamese enterprises need to study the requirements of the Chinese market, seek complementary business opportunities whereby they can promote cooperation and expand into Chinese markets with highly competitive products. China is a WTO member, and accordingly Vietnamese enterprises must understand Chinese law and Chinese application of WTO regulations especially on import-export, border trade, commodities inspection, financing and monetary conditions to promote trade with China .

Mr. Vuu Khai Thanh, President and CEO of Biti’s Management Board:

With over ten years of experience, we have chosen Lao cai -Hekow (Yunnam) as the gateway to the Chinese market. It is a carefully considered and long-term decision. In China, Biti’s has built relationships with over 20 general distributors and over 300 sales agents in several provinces and cities as well as establishing representative offices in China’s southern provinces for market promotion. We have invested US$10 million in the Lao Cai Trade Centre at the border gate to promote bilateral trade.

We cannot impose domestic trade policy on foreign countries and must reconcile our policies to protect our mutual long-term interests, especially our clients’ interests, working with Chinese partners to facilitate trade development. Vietnamese enterprises must also assert themselves in more distant markets whilst still protecting the domestic market.

• Lan Anh