Update: 17:01 | 04/11/2022
Vietnam–China trade is set to advance with border commerce activities increased after the visit of General Party Secretary Nguyen Phu Trong, analysts say.
The economic partnership between both countries is set to be bolstered after a joint statement was issued, and the chance of increasing trade is high, Nguyen Vinh Quang, deputy chairman of the Vietnam – China Friendship Association, told.
A container truck carrying durian heads for China from Dak Lak Province.
One of the issues that have been hampering bilateral trade is China’s zero-Covid policy, which has slowed down border trade in the northern provinces of Lao Cai and Quang Ninh in recent months, he said.
"If the border trade issues are resolved, conducting commerce activities between the two countries will be easier as China has been approving many more Vietnamese export items in recent years."
General Party Secretary Trong on Monday told his Chinese counterpart Xi Jinping that Vietnam wants to increase its exports to the 1.5 billion market, and he expects China to streamline its supply chain and boost trade with Vietnam via air, road and railway. Trong and his entourage arrived in Beijing Sunday, beginning an official three-day visit to China.
Xi said China will create favorable conditions for Vietnam to export agriculture, forestry and fishery items. "China is ready to increase its strategic partnership with Vietnam and together build a sustainable global supply chain," he said.
The joint statement by both leaders signed afterward reflected these agreements.
Nguyen Khac Giang, a researcher at Victoria University of Wellington, New Zealand, said these statements show a desire to tighten bilateral partnership.
"At least until the first half of 2023, Vietnam’s trade activities with China will be ensured even though the latter will still impose its zero-Covid policy."
Analysts expect that the trade surplus China has with Vietnam will be balanced out. Among countries in the Regional Comprehensive Economic Partnership, China has the biggest trade surplus with Vietnam at $45.5 billion.
To ensure trade balance, both China and Vietnam promised to import more agriculture and high-quality food products from each other.
China will push for the official import of yams and other fruits from Vietnam, while Vietnam will push for the import of Chinese milk.
Giang said that one notable partnership commitment the two countries have made is an increase in cooperation in e-commerce and logistics.
China said it will increase the purchase of high-quality Vietnamese goods via e-commerce.
"This is the first trade matter mentioned in the joint statement, which shows high interest from both countries," Giang said.
Vietnam is becoming the second biggest e-commerce market in Southeast Asia, according to data company Metric. China, meanwhile, seeks to expand its e-commerce network in the region.
Both countries are also discussing upgrading the railway system connecting the north of Vietnam to China.
"The more trade expansion between the two countries the better. This is important to Vietnam because we import many materials from China. On the other hand, Vientam could become a door that helps connect China with other blocs in which China is not a member," Giang said.
Xu Ningning executive director of China-ASEAN Business Council, said earlier that China and Vietnam have complementary economies and trade, and the demand for partnership is rising.
China is Vietnam’s biggest trade partner and second biggest export market behind the U.S. China was Vietnam’s first trade partner, with bilateral trade exceeding $100 billion in 2018.
Vietnam is China’s biggest trade partner in ASEAN and sixth biggest globally. Bilateral trade rose 24.6% last year to $165.9 billion.
Vietnam mainly exported agriculture produce and crude oil to China in 1995. By 2020, it was exporting electronics, cotton yarn and agriculture produce.
In the same period, China transitioned from selling machines (mainly engines), screens and refrigerators to Vietnam to chips and smartphones. Vietnam also imports metal, garments, plastic and chemicals from China.