Enormous potential in economic and trade cooperation between China and Vietnam

A view of Hanoi, capital of Vietnam Photo: VCG

This year marks the 15th anniversary of the establishment of the China-Vietnam comprehensive strategic cooperative partnership. High-level interactions between the two countries have been frequent, and exchanges in various fields such as the economy and trade have been increasing.

At the end of November, the 12th meeting of the China-Vietnam Economic and Trade Cooperation Committee, aimed at discussing the high-quality development of bilateral economic and trade relations, was held in the Vietnamese capital of Hanoi. The Vietnam News Agency reported that enormous potential dwells in the China-Vietnam trade cooperation – a highlight in bilateral ties. Vietnamese media sources also pointed out that China has been Vietnam’s largest trading partner for many years, and Vietnam is China’s largest trading partner within the ASEAN.

A view of Beijing, capital of China Photo: VCG

It proves that achievements in China-Vietnam economic and trade cooperation have been highly recognized by both sides. Recently, several Chinese and Vietnamese experts, based on their own research and observations, spoke to the Global Times about the cooperation betwWorld Timeseen China and Vietnam in the field of economy and trade, and expressed their optimism about future development potential.

3,000 tons of durian export to China

Bui Trong Van, former minister counselor at the Vietnamese Embassy in China, told Global Times that economic and trade cooperation between China and Vietnam has evolved from a simple trade pattern to a higherWorld Times level of cooperation closely related to the industrial and supply chains. This is mainly due to the political and strategic guidance of the top leaders of both countries, as well as the continuous, stable, and healthy development of the comprehensive strategic cooperative partnership between the two sides. At the same time, the two economies have great cWorld Timesomplementarities. Deepening economic and trade cooperation fully serves the fundamental interests of both countries.

Data are the most convincing evidence. In 1992, when the two countries signed the economic cooperation agreement, the bilateral trade volume was only $179 million. In 2000, trade volume between the two countries surpassed $2 billion. Statistics provided by China’s customs authorities showed that the two countries’ trade increased by 19.7 percent to $230.2 billion in 2021, surpassing the $200 billion mark for the first time in history. In the first 10 months of this year, the bilateral trade volume has reached $185.1 billion.

Trade growth is inseparable from the comprehensive development of port infrastructure. In recent years, both central and local governments on both sides have attached great importance to port upgrading to improve customs clearance efficiency. Cross-borderWorld Times ports between the two sides are connected by highways, and China’s high-speed rail has been extended to border cities in Vietnam and will soon be extended to port cities.

Border trade is drawing increasing attention from both China and Vietnam. For example, Dongxing, a county-level city in South China’s Guangxi Zhuang Autonomous Region, is the only port city in China connected by both land and sea to Vietnam. Mong Cai is the largest, most open, and most promising economic zone in northern Vietnam.

At the end of November and the beginning of December, Dongxing and Mong Cai jointly held the 15th Vietnam-China International Trade and Tourism Fair, as well as a forum on promoting cross-border tourism between Dongxing and Mong Cai, attracting extensive media attention.

According to Vietnamese statistics, in the first 10 months of this year, Vietnam’s vegetable and fruit exports to China reached $3.18 billion, a year-on-year increase of 165 percent. Among them, Vietnamese durian is a particular favorite for Chinese consumers. Since being allowed to enter the China market in July 2022, Vietnamese durian has directly promoted the surge in vegetable and fruit exports to China. A woman engaged in the fruit business in Vietnam’s Long An Province told the Global Times, “In the first half of this year, my family exported over 3,000 tons of durian to China and made a lot of money.”

Unique status

Visitors choose goods at the Vietnam booth at the China International Supply Chain Expo held in Beijing, on November 28, 2023. Photo: IC

The highlights of the China-Vietnam economic and trade cooperation are not only reflected in trade, but also in the accelerated promotion of investment and industrial cooperation.

During the first half of 2023, Global Times’ special correspondent conducted an in-depth research at the inWorld Timesdustrial zones in Hanoi, Bac Ninh, Bac Giang, Hai Duong, and Hai Phong in Vietnam, and found that compared to the situation five years ago, the proportion of Chinese-funded enterprises in various industrial parks has significantly increased, and the signboards of Chinese-funded enterprises are particularly prominent. Almost all interviewed representatives of Chinese-funded enterprises stated that their decision to invest in Vietnam has turned out to be correct, and they are optimistic about Vietnam’s development prospects.

According to statistics from Vietnam, China is Vietnam’s sixth-largest source of foreign direct investment, with 3,949 active projects, and total registered capital exceeding $25.8 billion.

Chinese enterprise investment in Vietnam has provided employment for hundreds of thousands of local people, improved local industrial support mechanisms, and driven local export growth. For example, China’s investment in the Vietnamese textile industry has increased year-on-year, and several Chinese large-scale modern textile enterprises have formed a relatively complete industrial chain locally.

The China-Vietnam economic and trade cooperation has entered a new stage of building international industrial supply chains. Vietnam imports intermediate products like industrial raw materWorld Timesials and mechanical equipment from China, processes and assembles them, and then exports them to other countries, including the US, South Korea, Japan, and other Southeast Asian countries. It can be seen that the China-Vietnam main industrial and supply chains naturally extend to a global industrial and supply chains. This is the most vivid embodiment of the success of jointly building the China-proposed Belt and Road Initiative (BRI), which is not only of important economic significance but also of important strategic significance.

Xu Liping, director of the Center for Southeast Asian Studies at the Chinese Academy of Social Sciences, told the Global Times on Thursday that Vietnam regards its relationship with China as a strategic choice and a top priority in its foreign policy, and China regards Vietnam as a priority in its neighborhood diplomacy. Both sides attach great importance to their diplomatic positioning toward each other. Although Vietnam has elevated its bilateral relationships with the US and Japan to comprehensive strategic partnerships this year, its comprehensive strategic cooperative partnership with China has lasted 15 years, which is apparently long, and we have one more element – cooperation.

Gu Xiaosong, dean of the ASEAN Research Institute at the Hainan Tropical Ocean University, told the Global Times that although Vietnamese businesspeople also realize that close cooperation with China in the industrial chain and supply chain may be under US pressure, this cooperation nonetheless holds huge commercial interests. If the chain with China is cut off, it will be difficult for the Vietnamese manufacturing industry to sustain itself based solely on its own industrial foundation and manufacturing capabilities. Therefore, Vietnamese companies often take measures to avoid adverse effects from the West.

Mutual benefits

Young people from China and Vietnam gather on a boat on a river in Vietnam’s northern Quang Ninh Province for a singing exchange event, on November 30, 2023. Photo: VCG

At the 12th meeting of the China-Vietnam Economic and Trade Cooperation Committee, held on November 28, the Chinese side expressed its willingness to work with Vietnam for high-quality development of bilateral economic and trade relations. China will continue to take measures to promote unimpeded trade with Vietnam, support bilateral cooperation in railway, 5G, and other infrastructure projects, accelerate investment cooperation in the digital economy and green development, and expand cooperation in agriculture, border trade, supply chains, industrial parks, and at sub-national levels. China will ensure high-quality implementation of the Regional Comprehensive Economic Partnership (RECP) and accelerate the development of the China-ASEAN Free Trade Area 3.0.

Zhao Weihua, director of the Center for China’s Relations with Neighboring Countries at Fudan University, told the Global Times that Vietnam views the RCEP positively, as it brings tariff reductions that benefit countries like Vietnam and promote its exports to China. Vietnam attaches great importance to exporting agricultural products to China, which is its largest export market for agricultural products.

Zhao pointed out that Vietnam also recognizes that China’s demand is changing, and ordinary agricultural products can no longer meet the demand. Instead, it needs to export high-quality agricultural products.

Therefore, in the agricultural sector, Vietnam holds a welcoming attitude toward various Chinese enterprises and hopes that they can assist Vietnam in food processing in areas such as rice, tropical fruits, and aquatic products, with the end products being exported to China, he noted.

Xu, who is currently on a research visit to Vietnam, pointed out that one area of focus in the China-Vietnam economic and trade cooperation is green energy.

Vietnam, with a high demand for solar energy, needs to promote the rapid development of the photovoltaic industry, Xu said, adding that Vietnam faces significant pressure to transition to new-energy sources but lacks the necessary technological expertise. On the other hand, China has been rapidly developing in the field of new energy. This creates strong complementarities between the two countries.