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Submitted by ctv_en_3 on Mon, 05/28/2007 - 11:55
The trade balance between Vietnam and China is not equal due to Vietnam’s import surplus. VOV has interviewed Ho Quoc Phi, Deputy Director of the Department of Mountainous and Border Trade under the Ministry of Trade about measures to boost Vietnamese exports to China. He has been a trade counselor to China for 10 years.

VOV: In the plan to boost exports to China, the Ministry of Trade outlined 10 key export products. Can Vietnam make a breakthrough in exports to China in the next few years?

Mr Phi: Vietnam has a strategy to develop 14 key items. The Ministry of Agriculture and Rural Development is building a plan for fruit and vegetable development while the Ministry of Fisheries is aiming to boost seafood exports, particularly to the Chinese market. Among key export products, coffee can gain a firm foothold in China. Though China has a population of 1.3 billion who drink tea daily, drinking coffee is becoming fashionable among young people. All Vietnamese cafes in China are always crowded as Vietnamese coffee is of high quality and is sold at reasonable prices. If only one-third of the Chinese population take to drinking coffee, Vietnamese coffee exports to the market will increase greatly.

 

VOV: Could you tell us about the implementation of the strategy?

Mr Phi: It takes a lot of time to turn the strategy into reality. Why haven’t potential products made any breakthroughs yet? So far, businesses have not paid any attention to exporting products made from cassava, but they are potential partners to China in the long run. Agriculture, forestry and seafood products have still achieved low export earnings, thus creating an imbalance trade value between Vietnam and China. The value of 10 tonnes of chemicals imported from China is hundred times more than that of a thousand tonnes of cassava. We all know this and cannot do otherwise because the added value of Chinese products is high. On the other hand, we have to continue exporting agro-forestry and seafood products in order to generate jobs for local people as well as improving their incomes.

 

VOV: As a member of the World Trade Organization (WTO), China will provide new mechanisms for controlling export activities in 2007. What disadvantages will Vietnamese businesses face when these mechanisms operate?

Mr Phi: Currently, China has committed to implementing the roadmap of a WTO member. This has created both advantages and disadvantages for Vietnamese enterprises waiting to export their products to the Chinese market. Vietnamese businesses will face fewer risks while exporting products to China. However, most domestic enterprises are small-and medium-sized ones and are used to a simple retail business model, not used to following WTO regulations. Therefore, it will take some time before they can change their business operations in line with WTO regulations. This is a challenge for them.


In addition, the Chinese Government has creatively applied GATT – WTO Agreement’s Article 24 that gives priority to boosting economic development in border regions. Article 24 says if goods are exported through sub-channels, they will enjoy a 50 percent reduction in import tax and value added tax. This explains why Vietnamese businesses mainly transport their products to China through Methulang bordergate in Lai Chau, not through the Mong Cai bordergate in Quang Ninh or the Tan Thanh bordergate in Lang Son. Last year, export turnover via the Maluthang bordergate reached US$60 million. Although transport in Vietnam’s north-western region is still difficult, a large number of Vietnamese products are exported to China through this region thanks to the country’s preferential policies. This is a matter that we should think over.

 

VOV: Thank you.


Four driving forces behind the development of Vietnam-China trade relations

Leaders of Vietnam and China have set a target for two-way export turnover of US$15 billion by 2010. According to economists, with the special attention of their leaders, the above target is within reach thanks to four following driving forces:


First, Vietnam and China complement each other in terms of trade. Vietnam imports most materials for production, such as fertilizer, steel and chemicals from China and exports to the country rubber, fruit and vegetables, seafood and coal.


Second, both China and Vietnam have joined the WTO recently so businesses of the two countries do not have features of the world’s trans-national groups. They have many things in common thanks to their similar cultures and customs. This creates favourable conditions for them to promote bilateral economic ties.


Third, the two countries are implementing a series of co-operative projects in the field of economics.

Fourth, the friendship between Vietnam and China always receives due attention, and encouragement from both sides.

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