Boosting Vietnam-China border trade

The total trade turnover across the Vietnam-China border reached US$2.8 billion in 2006, over US$7.1 billion in 2010, and over US$6.3 billion in the first nine months of 2011, an average annual increasing of around 20 percent.

This information was released at a recent conference held by the Ministry of Trade and Industry on November 18 to review northern border trade.

Shortage of capital resources

Tran Bao Giam, Head of the Trade Department in mountainous areas, said that northern border provinces are poor and have limited resources from the State budget to develop technical infrastructure, which is why the northern border areas have not been able to keep up with imports and exports across Vietnam-China borders, and one reason fruit exports through some border gates have stagnated.

Le Thanh Do, Vice Chairman of the Dien Bien provincial People’s Committee, said that his province is the only one of seven border provinces that has no international border gates. A detailed zoning plan for A Pa Chai border gates was completed in December 2008, but the shortage of capital has made it difficult to expand investment and trade in the region.

Lao Cai province still encounters difficulties, even though it has the famous Ha Khau international border gate. With an annual export turnover of over US$1.7 billion, the province still has only one national highway. Over the past ten months, exports through the border gate reached US$1.25 billion and are expected to hit US$1.5 billion in 2011 if the local transport system is improved.

Another problem is that goods imported and exported across the Vietnam-China border are not processed, so their export value is not high.

Sharing the same viewpoint, Deputy Chairman of the Ha Giang provincial People’s Committee, Nguyen Van Son, said that cross-border trade turnover across the border reached US$280 million last year, up 52.76 percent from one year earlier. The province should also focus on its advantages in agricultural exports.

Management difficulties

Vice Chairman of the Quang Ninh provincial People’s Committee, Nguyen Van Thanh said it is necessary to clarify common interests at border areas. Although cross border trade is very active, State budget collections have not been synchronous.

Mr Giam said that services necessary to penetrate markets, such as market research, consultancy, brokerage, and assessing regional advantages, have not been implemented effectively in border areas. He added that Vietnam has not created a general strategy for developing border trade with China, There are also limitations in predicting the market and collecting the accurate information, as well as in the policies regarding the Chinese market. Only small and medium sized enterprises are currently involved in trade on the Vietnam-China border and they have not set up long-term development strategies.

Nguyen Manh Ha, director of Quang Ninh province’s Department of Industry and Trade, asked for 30 percent of the total revenues to be re-invested in improving border infrastructure. The Department of Industry and Trade has called on businesses to invest in infrastructure and warehouses.

There has not been a consensus on managing trade activities through Vietnam-China border gates. The exchange of goods depends mainly on the Chinese side in terms of the time and location of deliveries. Some localities said that Chinese goods are able to penetrate the Vietnamese market through any border gate while Vietnam can only export goods to China through specifically designated gates

Deputy Minster of Industry and Trade Nguyen Cam Tu acknowledged the limitations in controlling trade activities along the Vietnam-China border, saying that the infrastructure remains poor and backward. There are also cumbersome administrative formalities and the slow implementation of policies which do not create a favorable corridor that encourages business development.

According to various experts, Vietnam has not established an effective long-term strategy for developing border trade with China, and it is confused by China’s border trade policies, which has greatly affected businesses operational efficiency, especially for agricultural export businesses. Therefore, Vietnam needs to devise a long-term strategy and upgrade border gates to support exports.