is Vietnam's export strength. The opening of border trading points in the late 80s and early 90s, especially the official restoration of diplomatic relations between the two countries, created favorable conditions for bilateral trade to develop strongly, meeting the needs of both sides for consumer goods and raw materials.
Second , in addition to trading consumer goods and raw materials, the two sides have also traded machinery for production. Of course, the process of buying and selling machinery takes longer and goes through more stages, thus slowing down the growth rate of foreign trade between the two sides.
Third , the two sides have signed many agreements, creating legal conditions for bilateral trade to develop. Based on these agreements, the two sides encourage businesses to strengthen direct relations through survey trips, market research and exhibitions.
Fourth , the two countries apply many measures and channels for exchanging goods. The measures currently applied are: normal trade, processing, barter, providing equipment for payment by products... Trade exchange is carried out through many different channels: exchange of border residents, official and unofficial import and export, transit services, bonded warehouses.
Fifth , the purchase and sale of goods between large corporations or groups between the two countries is increasing, contributing significantly to the increase in trade between the two countries.
b. The commodity structure is both complementary and
compete with each other.
Vietnam exports to China 4 main groups of goods:
- Group A: fuel sources include: coal, crude oil, chromite iron ore, medicinal herbs, essential oils, natural rubber.
- Group B: food, agricultural products, vegetables, cassava chips, beans, fruits
tropical, pineapple, banana, rambutan, mango...
- Group C: seafood: fresh and frozen seafood, farmed animals:
snake, turtle, tortoise.
- Group D: consumer goods; high-end household wooden furniture, shoes, soap. China's exports to Vietnam are mainly divided into 5 groups of goods:
- Group A: complete machinery and equipment: vertical kiln cement factory, sugar factory.
- Group B: mechanical machinery, means of transport, medical machinery and equipment,
precision machinery, textile machinery, agricultural machinery.
- Group C: raw materials: petroleum products, cement, iron and steel, construction glass of all kinds, chemical construction materials, dyes, pesticides, fertilizers.
- Group D: food, food, fruit: wheat flour, sugar, vegetable oil, apples, pears, plant varieties.
- Group E: consumer goods, medicines, electronics, clothing, toys...
The above commodity structure is not only complementary but also suitable for the economic development level of both countries. Vietnam's export structure is mainly agricultural products and raw materials, so Vietnam's export products meet the needs of the economy and people's lives in China, especially in the provinces sharing borders with Vietnam. Currently, along with Singapore, Indonesia, Malaysia, Vietnam is one of the main trading partners of Hainan province (China). Over the past 20 years, the economic development of Yunnan province (China) has mainly relied on economic cooperation with Thailand, Vietnam, Laos and Myanmar. The total border trade value of Yunnan and Guangxi provinces accounts for more than 50% of the total border trade value of China, of which a significant contribution is made by the Vietnam-China border trade. Compared to Vietnam, China is at a higher level of economic development, and China's small machinery goods are suitable for Vietnam's conditions; economic development on the basis of small-scale production. In addition, some Chinese consumer goods meet Vietnam's needs.
The structure of Vietnam-China trade goods is similar to the structure of trade between China and most other ASEAN countries. Except for Singapore, the main products exported by other ASEAN countries to China are: wood, rice, rubber, natural, copper, aluminum, vegetable oil... In the future, some Southeast Asian countries will become one of the places supplying raw materials for China's industry. Besides, Southeast Asia is one of the most ideal markets for China to export some consumer goods and agricultural products.
It is clear that Vietnam and China are both economically developing countries, the structure of export goods is mainly processed goods, primary products, the proportion of science and technology in each product value is low, relying on cheap labor, so it is inevitable that there will be competition with each other. This is a normal thing in international economic relations. This competition does not cause much hindrance to the development of Vietnam - China trade. As analyzed above, the average growth rate is still higher than the average growth rate of foreign trade of both countries in the same period.
c. Border trade contributes a significant part to the total trade turnover between the two countries.
Vietnam-China informal trade has grown strongly since 1989 when the governments of the two countries allowed people to visit each other and exchange essential goods. After the two countries officially normalized diplomatic relations in 1991, informal trade grew strongly with increasing scale and quantity. Although researchers have given different figures on the total value of goods traded across the border between the two countries, it can be seen that the total value of informal trade is a significant number compared to the total value of official trade. The reason for this situation is because:
One is that some goods are either in small quantities or of poor quality,
cannot conduct exchange through formal trade.
Second , some traffickers take advantage of poor management of cross-border trade to conduct smuggling for profit.
Third , immediate payment between the two countries is carried out flexibly, possibly in the form of barter. Meanwhile, payment in official trade must comply with the legal regulations of each country. For that reason, although in 1993 the State Bank of Vietnam and the People's Bank of China signed a Payment and Cooperation Agreement, which clearly stipulates the forms of payment for exports between the two countries, the value of goods paid through banks is still small compared to the total turnover between the two countries.
d. Unbalanced trade staff
Table 2: Vietnam - China official trade balance 1991-1999 (million USD)
Year
Vietnam's exports | Imported from Vietnam | Balance of trade trade | |
1991 | 10.23 | 21.40 | -11.17 |
1992 | 72.71 | 106.36 | -33.65 |
1993 | 122.63 | 276.00 | -144.37 |
1994 | 191.16 | 341.66 | -150.50 |
1995 | 332.06 | 720.13 | -388.07 |
1996 | 308.48 | 842.15 | -553.67 |
1997 | 357.10 | 1078.54 | -721.44 |
1998 | 120 | 610 | -490 |
First 5 months | 91.51 | 316.76 | -225.25 |
1999 |
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Looking at the table above, we see that along with the increase in Vietnam-China trade turnover, Vietnam's trade deficit with China is increasing. Especially in 1998, the Vietnam-China trade deficit with Vietnam increased while Vietnam's total trade deficit decreased by 400 million USD. On average, Vietnam's import value is 2.4 times the value of Vietnam's exports to China. In fact, Vietnam's trade deficit is a common phenomenon in Vietnam-China trade relations from the 50s to the present. During the three decades of the 50s, 60s and 70s, Vietnam achieved a trade surplus with China in four years: 1958, 1959, 1976 and 1977. In the remaining years, Vietnam was always in a trade deficit. The reason for this situation is because:
Firstly , some raw materials, small machines and some consumer goods from China meet the needs of Vietnam. Overcoming the economic crisis in the late 1980s, Vietnam's economic reform continued to achieve great achievements, and production was increasingly improved. In that context, raw materials such as chemicals and cotton fibers needed to be
Equipment for light industry, machines such as small generators, small irrigation machines, and some cheap Chinese consumer goods have met Vietnam's needs.
Second , the structure of Vietnam's export goods is mainly raw materials and low-value agricultural products and is often affected by the downward trend of world market prices. Therefore, in Vietnam's exports in general, there have been years when export volume increased but export value did not increase, or even decreased.
Third , restrictions on import quotas lead to restrictions on China's import of some products in which Vietnam has advantages such as rice, natural rubber, etc.
e. The proportion in total foreign trade turnover of each country is still low.
Trade relations between Vietnam and China have developed rapidly in recent years, but the total value of official and unofficial trade accounts for only a very small proportion of the total foreign trade turnover of each country. According to calculations, the total value of two-way official trade accounts for only 7% of Vietnam's total trade turnover and 0.4% of China's total foreign trade turnover. Vietnam is only China's 27th trading partner. Vietnam's contribution to ASEAN-China trade is also very small. ASEAN is the sixth largest trading partner after China with a total trade value accounting for 13% of China's total foreign trade turnover, much larger than the total value of Vietnam-China trade.
2. Vietnam - China trade development basis
First , the political will of the two countries. During comrade Le Kha Phieu's visit to China earlier this year, the two highest leaders of the two countries agreed on the guiding principles for the Vietnam-China relationship in the coming time: friendly neighborliness, comprehensive cooperation, long-term stability, and looking towards the future . These principles are of great significance, clearly showing the framework of the relationship as well as the goals in the relationship between Vietnam and China, thus having a positive effect on promoting the general cooperative relationship between the two countries and trade relations in particular. In October 1998, the leaders of Vietnam and China expressed their determination to bring the total value of official trade to 2 billion dollars by the year 2000. During their recent visit to Vietnam, Chinese Premier Zhu Rongji and Vietnamese Prime Minister Phan Van Khai once again affirmed their determination to realize this goal. This is a great determination of the leaders of the two countries, demonstrating the political will as well as the desire of both sides to further promote trade relations between the two countries. This political will is the decisive factor in the existing problems in trade relations between the two countries.
Second , a legal basis has been established for trade activities between the two countries. As mentioned above, Vietnam and China have signed many agreements on economic and trade cooperation between the two countries. In particular, the two countries have signed an agreement on border trade, aiming to correct unhealthy phenomena: tax evasion, tax smuggling in the border areas between the two countries, creating favorable conditions for the development of official trade.
Third , developing Vietnam-China trade relations is consistent with the foreign economic strategies of both countries. The three triangles in developing foreign economic relations are: the small triangle (referring to mainland China, Hong Kong and Taiwan), the middle triangle (referring to neighboring countries: ASEAN and South Korea), and the greater triangle (referring to China, the US, Japan and economically developed countries). China clearly defines its strategy of promoting economic relations with the small triangle, alliance with the middle triangle and relations with the greater triangle. Thus, developing economic relations with neighboring countries, including Vietnam, will create a basis for China to participate more in international economic activities, demonstrated through promoting economic and trade relations with economically developed countries.
For Vietnam, developing economic and trade relations with China is not only in line with the foreign policy of "being friends with all countries", but also serves the country's economic development strategy: Vietnam focuses on relations with neighboring countries to create a peaceful and stable environment, contributing to maintaining national security and creating favorable conditions. In terms of economy, the goal of industrialization and modernization is to increase the productivity of the whole society, including light industrial factories using some raw materials imported from China.
Fourth , developing trade relations is in line with the objective needs of both sides. As analyzed above, the structure of Vietnam-China import and export goods is complementary. As a country with more advanced technology and starting to accumulate large foreign exchange reserves, China can help Vietnam in many economic and technical aspects. For its part, Vietnam creates a significant market for many goods, especially small machinery serving Chinese agriculture.
Fifth , in addition to bilateral cooperation, the two sides can also promote trade relations through multilateral channels, through the ASEAN-China economic and trade relations, the Asia-Pacific Economic Cooperation (APEC), and in the future through the World Trade Organization (WTO) when the two countries become members.
Among the above factors, the objective factor is the needs of both sides; the political will factor is the most important subjective factor, deciding the development of Vietnam - China trade relations in the coming time.
3. Developments in bilateral trade
According to international practices and customs, in order for bilateral goods exchange activities to be implemented on a legal basis, Vietnam and China signed a Trade Agreement right from the time the political relations between the two countries were normalized. Later, the two countries also signed a number of other Agreements related to bilateral trade relations. Some of the Agreements that can be mentioned here are: Agreement on maritime transport and railway transport; Agreement on transit goods between the two countries; Agreement on the establishment of the Vietnam - China Economic - Trade Committee; Agreement on ensuring the quality of goods
Immigration and mutual recognition; Road transport agreement; Agreement on avoidance of double taxation and prevention of tax evasion...
Both China and Vietnam have a need to exchange goods. A few years before the normalization of relations between the two countries, there were some trading activities between the two countries' residents on the land border, of course, unofficial and limited. Since the normalization of relations between the two countries and the signing of the Bilateral Trade Agreement, trade relations between Vietnam and China have entered a new period of rapid development and expansion, with two-way export turnover increasing rapidly, each year higher than the previous year. This is reflected in some specific figures below:
Year
Total two-way import-export turnover (million USD) | |
1990 | 152.54 |
1991 | 270 |
1992 | 280 |
1993 | 690 |
1994 | 758 |
1995 | 1,050 |
1996 | 1,150 |
1997 | 1,240 |
1998 | 1,540 |
1999 | (first 5 months of the year) reached 408.28 |
The figures given in the table above do not include the value of human trafficking.
Fraud and illegal smuggling across borders that the State cannot control.
Currently, China has become one of Vietnam's important trade partners, China's exports to Vietnam account for 7% of Vietnam's total import turnover, placing China in 7th place among more than 100 countries and territories having trade relations with Vietnam. Meanwhile, Vietnam's export turnover to China is still very modest, accounting for only about 0.4% of China's total import turnover, ranking 27th out of more than 200 countries and territories having trade relations with China as of the end of 1998.
According to incomplete statistics, from 1990-1991 to 1999, Vietnam exported to China, through official and unofficial channels, more than 100 different groups of goods and specific items. Some typical items can be mentioned here: rice, rubber, cashew nuts, coffee, crude oil, vegetable oil, cassava chips, green bananas, processed household wooden furniture, seafood, specialty fruits (mango, lychee...), agricultural and forestry products, metal ores and scrap iron, cars (temporarily imported for re-export), some daily consumer goods such as plastic sandals, soap...). Among the above items, rubber and cashew nuts account for a fairly large proportion of the total number of items exported by Vietnam.
Exports abroad, more than half of the rate increases annually. Please give some specific numbers.
can:
Unit: tons
Year
1993 | 1994 | 1995 | 1996 | 1999 (first 5 months) | ||||||
Quantity | % | Quantity | % | Quantity | % | Quantity | % | Quantity | % | |
Rubber Cashew | 55,707 21.5 | 59.3 | 85,662 31.7 | 65.9 | 104,945 55.7 | 73.3 | 70 | 10.80 | ||
Other items such as rice, seafood, etc. account for about 10% of the total items mentioned above that Vietnam exports abroad. What needs to be pointed out here is that most of the items that Vietnam exports to China are in raw form, and very few are processed before being exported, so the export volume is sometimes large but the actual value is small. This is a big disadvantage for Vietnam in trading with China in recent times.
The goods that China has exported to Vietnam in recent years through official and unofficial channels are very rich and diverse, with over 200 groups and specific goods, which is double the number of goods that Vietnam exports to China. Some typical groups and items can be mentioned here: chemical products, pesticides, equipment and means of transport, steel and steel billets, machinery and equipment for vertical kiln cement factories, machinery and equipment for the sugar cane industry, agricultural machinery and spare parts, machinery and equipment for the footwear industry, sanitary equipment, construction materials, civil glass, tiles of all kinds, light industrial products and consumer goods such as: bicycles and spare parts, household appliances of all kinds, fabrics and knitwear, ready-made clothes, porcelain, stationery, electronic appliances, children's toys, etc. In the trade relations with China since the normalization of political relations between the two countries, we have imported many necessary things (as mentioned above) to meet the needs of economic construction and development in the country as well as the needs of ordinary consumer goods of the working people. At the same time, we have also sold to China some items that can be produced domestically in different quantities as mentioned above. Objectively speaking, this is also one of the important reasons promoting the development of industries with products sold to China in recent times.
4. The situation of cross-border trade between Vietnam and China
a. Overview of the situation of cross-border trade between Vietnam and China over the past 50 years.
Since 968, Vietnam has become an independent country in Southeast Asia. Since then, Vietnam has had cross-border trade relations with many neighboring countries, including China. Following the Vietnamese feudal dynasties: Ly, Tran, Le, Nguyen, they continued to have cross-border trade relations with the Chinese feudal dynasties: Tong, Nguyen, Minh, Thanh. At that time, cross-border trade between Vietnam and China was just a common practice to complement each other, with two main forms: tribute and folk.
Entering the modern period, Vietnam became a semi-colony of Western capitalism. Vietnam and China signed the "Vietnam Treaty (1885)" and the "Border Cooperation Program (1896)", which stipulated 25 patrol stations along the common border between the two countries, which were also common market places for residents on both sides of the border.
In 1945, after the signing of the second world representative agreement, the Democratic Republic of Vietnam (now the Socialist Republic of Vietnam) was born (September 2, 1945), followed by the establishment of the People's Republic of China (October 1, 1949), and just a few months later (January 18, 1950), the Democratic Republic of Vietnam (hereinafter referred to as Vietnam) and the People's Republic of China (hereinafter referred to as China) established diplomatic relations, which as of January this year has been exactly 50 years. Since then, a new era has opened in the relations between the two countries in many aspects, creating conditions for the strong development of economic and trade relations between the two countries, including cross-border trade between Vietnam and China. During the period from the 1950s to the 1970s, in the spirit of "being both comrades and brothers", the two countries signed the "Protocol on small-scale border trade between Vietnam and China" (1955) and the "Protocol on the exchange of goods between Vietnam and China (1957)" which stipulated the establishment of 26 transaction points (19 on land and 7 at sea) on the common border of the two countries. During the period (1956-1969), the cross-border trade between Vietnam and Guangxi was worth 44.94 yuan. During the period 1966-1976, China was carrying out the cultural revolution, almost completely closed to the outside world, which affected cross-border trade between China and neighboring countries, including Vietnam.
At the end of 1978, China introduced the national policy of reform and opening up, but at that time (1978-1988), it only focused on opening up coastal areas, not paying attention to opening up border areas. At the same time, from 1979 to the end of the 1980s, the relationship between Vietnam and China entered an abnormal period, the common border between the two countries became a battlefield instead of a market, these factors affected the disruption of cross-border trade between the two countries.
Entering the 90s, the world ended the Cold War, in Europe the socialist countries collapsed one after another, which had a significant impact on the socialist countries in Asia, such as China and Vietnam. In China, after the Tiananmen Square incident (June 4, 1989), Western capitalist countries implemented a policy of containment and containment towards China. Faced with the changing situation in the world and at home, China adjusted its foreign opening policy. On the one hand, China began to focus on improving friendly relations with neighboring countries. On the other hand, along with focusing on opening up coastal areas, it began to open up border areas, creating favorable conditions for opening up cross-border trade between China and neighboring countries, including Vietnam.
In Vietnam, since 1986 (the 6th Congress), the policy of innovation and opening up has been proposed, wanting to be friends with all, creating conditions for improving relations with all countries, including neighboring countries including China.
Stemming from the desire to improve the relationship between leaders and employees
people of Vietnam and China, November 1991 senior leaders of