A high-level Vietnamese delegation led by State President Nguyen Minh Triet began an official visit to China on May 15 at the invitation of Chinese President Hu Jintao. The visit has taken place at a time when Vietnam-China two-way trade turnover has been increasing and the number of Chinese investment projects in Vietnam is rising rapidly. During the visit, nearly 100 enterprises operating in various fields have accompanied the State President to seek investment and business opportunities with Chinese partners.

The volume of import-export goods between the two countries has increased sharply in recent times. Last year, two-way trade turnover between Vietnam and China reached over US$10 billion. Vietnam’s key export products to China are crude oil, seafood, coffee, rubber, fruit, footwear and tea. Chinese exports have also increased considerably including pharmacy items, machines, spare parts, oil and gas, textiles and garments and leather. There have been big changes in importing and exporting goods. For example, although Vietnam’s major exports remain agro-forestry and seafood products in their raw forms, the product quality has been improved remarkably. Some consumer goods have expanded its shares in Chinese market such as shoes, tea, seafood and fruit.

China is Vietnam’s biggest partner for three consecutive years

Chinese ambassador to Vietnam Hu Qianwen said that under the motto of "friendly neighbourliness, comprehensive cooperation, long lasting stability and looking towards the future", Vietnam-China relations have developed comprehensively in this new era. Economic and trade cooperation in particular have entered a golden development period. For three consecutive years, China has been Vietnam’s biggest partner. In 2006, two-way trade turnover between Vietnam and China reached US$10 billion, fulfilling the set targets four years ahead of schedule. In addition, there have been important developments in major cooperation projects between the two countries, especially in the field of investment.

China became an official member of the World Trade Organisation in December 2001. In March 2002, China granted Vietnam the Most Favoured Nation status along with other WTO member countries. In November 2002, China and ASEAN signed a framework agreement on comprehensive economic cooperation, paving the way for the next round of negotiations with a view to building an ASEAN-China free trade area (ACFTA) in the next ten years. All the events have provided a firm legal foundation for boosting economic cooperation “Two corridors and One Economic Belt” now operate through Kunming-Lao Cai-Hanoi-Hai Phong, and Nanning-Lang Son- Hanoi-Hai Phong and the Gulf of Tonkin. Priority will be given to building infrastructure like railways, roads, and ports to develop border trade, tourism, industry, agriculture, and forestry as well as exploring and processing natural resources.

Liu Qibao, Party Committee Secretary of the Guangxi Zhuang Autonomous Region, said more and more investors from Guangxi are keen on running business in the Vietnamese market. By the end of 2006, Guangxi invested in 58 projects in Vietnam with total investment capital of approximately US$50 million. At present, Vietnam and China are facing golden opportunities, especially Guangxi province since the two countries reached the economic agreement on “Two Corridors, One Economic Belt”. Under the agreement, the two countries will cooperate in building traffic infrastructure, developing the tourism sector, transporting goods, upgrading infrastructure at bordergates and simplifying custom procedures at bordergates.

Currently, China is completing policies and mechanisms on import-export management and gradually reducing tariff and non-tariff barriers in accordance with the standards of the World Trade Organization (WTO). As such, Vietnamese businesses should now strive to adjust themselves to China’s new policies and mechanisms, in order to meet the necessary procedures for import-export activities. They should also cooperate with Chinese partners in the fields of agro-forestry and aquaculture production and processing to increase the proportion of processed goods that can be exported to China and other countries.

Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said that two-way trade turnover between Vietnam and China is still limited, when China-ASEAN trade turnover reaches more than US$140 billion. It requires more effort by both sides’ enterprises so as to increase the two-way trade turnover and reduce Vietnam’s trade deficit. Vietnam’s WTO admission has created more cooperation opportunities for the two countries to boost key export items and promote cooperation in the fields of investment and technology, particularly when the Chinese Government is encouraging Chinese businesses to invest in foreign markets, Mr Loc said.

Now, that both Vietnam and China are WTO members the two countries face new opportunities in bilateral ties. Since China is a powerful in terms of export, Vietnam should have a long-term vision in order to find suitable products to export to the Chinese market.