Much room for trade cooperation between Vietnam and China

Prime Minister Pham Minh Chinh and Chinese Premier Li Qiang witnessed the signing ceremony of a Memorandum of Understanding between the Vietnamese Ministry of Industry and Trade and the General Administration of Market Supervision of China (Beijing, June 26, 2023). (Photo: Duong Giang/VNA)

Vietnam and China are two neighboring countries with a long-standing traditional friendship. The Party, State and people of Vietnam attach importance to and determine that developing friendly neighborly relations and a Comprehensive Strategic Cooperative Partnership with the Party, State and people of China is a consistent and long-term policy, a strategic choice and a top priority in Vietnam's foreign policy.

In recent years, the Vietnam-China Comprehensive Strategic Cooperative Partnership has been continuously consolidated and enhanced. High-level and all-level exchanges and contacts have taken place regularly in flexible forms, while economic, trade and investment cooperation has grown positively and continuously reached new records.

Therefore, the official visit to Vietnam by Chinese Premier Li Qiang will create more opportunities to continue expanding economic, trade and investment cooperation between the two countries.

Maintain growth

Experts say that in 2024, Vietnam and China are working with ASEAN countries to promote negotiations to upgrade the ASEAN-China FTA to version 3.0 to open up more economic and trade opportunities for countries in the region in general and the two countries in particular. In particular, China has always been Vietnam's largest trading partner with bilateral trade growth in the past 10 years at double digits.

With many advantages in economic and trade cooperation, over the past years, trade exchange between Vietnam and China has maintained a stable and sustainable growth momentum. In the first 9 months of 2024, bilateral import-export turnover reached 148.6 billion USD; of which, Vietnam exported goods to China at 43.6 billion USD, up 1% over the same period; imports from China reached 105 billion USD, up 32.5%.

From now until the end of 2024, with strong trade improvement in the first half of the year, it is forecasted that Vietnam-China import-export turnover could approach the 200 billion USD mark.

Vehicles carrying fresh lychees wait to complete export procedures to China through Kim Thanh International Road Border Gate No. II. (Photo: Quoc Khanh/VNA)

Currently, the two sides are actively promoting “hard connections” between the two countries in terms of railways, highways, and border gate infrastructure; upgrading “soft connections” in terms of smart customs and smart border gates to facilitate and further enhance trade exchanges between the two sides.

In terms of investment, China is the leading partner in terms of the number of new FDI projects invested in Vietnam (accounting for 29.3%) and ranks second with an investment capital of 3.2 billion USD (accounting for 13% of total investment capital). The two sides have also actively coordinated to gradually resolve outstanding problems in a number of previous economic cooperation projects, creating a positive atmosphere for new cooperation projects between the two countries.

Economist Vu Vinh Phu, former Deputy Director of the Hanoi Department of Trade, said that China is a large market with 1.4 billion people and great purchasing power. This is an attractive market not only for Vietnamese goods but also for goods from many other countries with a large import rate for many of Vietnam's strengths such as textiles, footwear, electronics, agriculture, forestry and fishery products, etc. However, China is increasingly demanding on standards such as growing area codes, packaging codes, export standards, etc.

Besides, Vietnam imports a lot of goods from China, mostly raw materials for production, so there is no need to worry. At the same time, Vietnam also imports a lot of agricultural products and consumer goods from China, so it is necessary to improve the competitiveness of domestic goods to increase exports to this market to help reduce the deficit, moving towards a trade balance.

In addition, Vietnam and China currently have many integration frameworks such as the ASEAN-China FTA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)... However, Vietnam's ability to utilize them is only about 30-40%. Moreover, China has made relatively good use of cross-border e-commerce to bring goods to Vietnam.

On the contrary, Vietnam has not yet taken full advantage of this advantage, so it needs to make efforts to take advantage and build large warehouses at the border to bring goods deep into the Chinese market.

Exploit the advantage

At the 13th meeting of the Vietnam-China Economic and Trade Cooperation Committee, Chinese Minister of Commerce Wang Wentao proposed that Vietnam strengthen investment and supply chain cooperation; focus on implementing investment cooperation documents and digital economy - green development initiatives agreed upon by both sides. At the same time, he suggested that Vietnam have policies to support and encourage the development of power projects; cooperate in industrial parks; continue to negotiate and sign MOUs on strengthening economic cooperation in production and supply chains...

At the same time, Minister Vuong Van Dao proposed solutions to promote trade cooperation; including negotiating and signing documents on agricultural trade cooperation; enhancing e-commerce cooperation; discussing standards and assessing the conformity of imported and exported products; satisfactorily resolving anti-dumping investigations.... On the other hand, he proposed that the two sides discuss and complete the process of joining the FTA of new members.

Minister of Industry and Trade Nguyen Hong Dien affirmed that the two sides need to strengthen investment and supply chain cooperation; in which, prioritizing cooperation in digital economy and green development. Moreover, with the rapid development of electric cars, the Vietnamese Government is interested in and promulgating a number of mechanisms and policies on the development of electric cars such as preferential policies, support for the production and assembly of electric cars; encouraging the use of electric cars such as incentives for special consumption tax and registration fees.

China's electric car production. (Photo: THX/TTXVN)

Currently, the Ministry of Industry and Trade is developing a Strategy for the development of the Vietnamese automobile industry to 2030, with a vision to 2045; including the development of electric and green energy cars in Vietnam. In the coming time, the Ministry of Industry and Trade will coordinate with ministries and branches to develop and propose to the Government mechanisms and policies to support and encourage the consumption of electric vehicles.

Recently, the Ministry of Industry and Trade coordinated with the Ministry of Agriculture and Rural Development of Vietnam, the Embassy of Vietnam in China and the Vietnam Fruit and Vegetable Association to organize the first Vietnam Fruit Festival with the theme "Vietnamese Fruits - Four Delicious Seasons." It is expected that Vietnam will soon be provided with a free booth displaying regional fruit, agricultural, forestry and fishery products at Tan Dia Phat Center.

Within the framework of the Vietnam - China Fruit Import and Export Supply Chain Connection Forum held in Beijing, China, 4 signings were carried out by Ameii Vietnam Joint Stock Company and Beijing New Cooperation Development Company; Vietnam Fruit and Vegetable Association and China Fruit Association; Vina T&T Group Import and Export Company and Beijing Yundian Food Science and Technology Development Company Limited; Vina T&T Group Import and Export Company and Asia Trade Transaction Company Limited.

Reporting at the meeting with Chinese Deputy Prime Minister He Lifeng, Minister Nguyen Hong Dien proposed that the Chinese State Council continue to support and facilitate the penetration of high-quality agricultural products of Vietnam into the Chinese market. At the same time, support the branding of some products and areas of strength of Vietnam in the Chinese market such as dairy products, agricultural products, seafood, processed foods, etc.; bring Vietnamese goods deeper into domestic localities, retail systems as well as e-commerce platforms in China.

In addition, the Minister proposed to coordinate to facilitate and effectively channelize customs clearance between border gates, avoiding the situation where goods are only concentrated at certain border gates causing local congestion, especially for agricultural and aquatic products exported from Vietnam. On the other hand, he proposed that the Chinese State Council support the establishment of Vietnam Trade Promotion Offices in China, first in Hainan Province, China.

An international train transporting export goods from Song Than Station to China. (Photo: Huyen Trang/VNA)

In addition, strengthen the connection and ensure the smooth supply chain of goods in the industrial and agricultural sectors between the two countries; encourage enterprises representing the development level of China, high technology, energy saving and environmental friendliness to expand investment in Vietnam. At the same time, propose that China focus on promoting cooperation in implementing 3 railway routes connecting Vietnam - China: Lao Cai - Hanoi - Hai Phong; Lang Son - Hanoi and Mong Cai - Ha Long - Hai Phong.

Regarding the economic cooperation between the two countries, Deputy Prime Minister of the State Council Ha Lap Phong said that the economic and investment cooperation between the two countries is growing stronger, deeper, more comprehensive and more practical. In the near future, China will organize the 7th Import Fair in Shanghai. This is an initiative initiated by General Secretary and President Xi Jinping, and interested Vietnamese enterprises can participate.

Through the Fair, Vietnamese enterprises can promote the export of high-quality agricultural products to Chinese consumers and participating partner markets. Regarding the proposal to promote cooperation in railway transport, the Chinese side is always interested and ready to support, but the two sides need to study the feasibility in the process of building routes to create the most favorable conditions for businesses and people of the two countries.

Source: https://congthuong.vn/nhieu-du-dia-trong-hop-tac-thuong-mai-giua-viet-nam-trung-quoc-351935.html