It’s still possible for Vietnam-China trade turnover to reach US$25 billion in 2010 thanks to the growth of bilateral trade in the final months of 2009, says Vietnam’s Trade Counsellor to China Nguyen Duy Phu during an interview granted to VOV.
Reporter: Could you elaborate on the development of trade relations between Vietnam and China in 2009?
Nguyen Duy Phu: Trade turnover fell due to the global financial meltdown but has gradually recovered ever since.
Statistics from the Chinese customs department say that bilateral trade amounted to over US$18.4 billion from January to November 2009, an increase of 2.9 percent. Of this figure, Vietnamese exports accounted for more than US$4.2 billion (up 5.1 percent) and Chinese exports – US$14.2 billion (up 2.3 percent).
The structure of exports to China has remained unfavourable for Vietnam’s growth as low-value products such as agro-forestry products plus minerals made up 60 percent of the country’s exports. Meanwhile, China mainly exported industrial commodities and its farm produce and minerals accounted for only 14 percent of the total.
Vietnam still suffers a large trade deficit with China. This got worse towards the end of 2009. According to the Chinese customs figures, Vietnam’s trade deficit with China had exceeded US$9.9 billion by the end of 2009, up 1.1 percent from the same period last year.
Reporter: How did the global financial crisis affect trade ties between Vietnam and China?
Nguyen Duy Phu: Vietnam-China two-way trade grew by around 30 percent until the end of December 2008. There was a dramatic decline from January to May 2009. Then came signs of gradual recovery.
However, I would like to stress that such a drop was not too big and took place in a relative short period of time in comparison with the trade between Vietnam and the rest of the world. Moreover, farm produce has seen a strong growth despite the crisis because it has taken advantage of incentives within the ASEAN-China free trade area.
The Vietnamese government has taken every possible measure to overcome obstacles and maintain its level of exports, including those to China.
It has also scrutinized and issued policies on taxes and procedures for management, quarantine and checking the origin of goods in order to facilitate export activities.
Beside Guangxi and Yunnan, the two provinces that share the border with Vietnam, the country also cooperates in economics and trade with other Chinese provinces including Hainan, Sichuan and Chongqing. The opening up and diversity of these markets have enabled Vietnamese products to penetrate the Chinese market.
There are a series of dynamic trade promotions this year. In July, Vietnam’s Minister of Industry and Trade Vu Huy Hoang chaired a conference with 7 northern provinces to find a way of boosting trade with China. The Ministry also helped Vietnamese enterprises to participate in a number of large exhibitions in China. In October, when Prime Minister Nguyen Tan Dung visited to Sichuan and Chongqing, the Ministry signed several commercial and economic agreements with the two provinces to promote relation between both parties.
Reporter: Vietnam and China are posed to reach a two-way trade turnover of US$25 billion in 2010. Do you think it is a feasible target?
Nguyen Duy Phu: With bilateral trade and the recovery and sustainability of both economies at the end of this year, it is expected that we can reach this target.
To achieve this, the government and businesses must work very hard. The country has to invest heavily to improve the structure of exports to China by decreasing the volume of unprocessed products and increasing that of processed products.
Vietnamese enterprises should take the advantage of the ASEAN-China free trade area (ACFTA) when it starts on the first day of 2010 to push exports to China. Theoretically, Vietnam still has great competitive advantages as the tax will be cut several years later.
The cooperation in trade and economy between China and Vietnam also has a geographical advantage over other ASEAN nations. Under the cooperation agreement, both countries have continuously upgraded their infrastructure and facilities such as border gates, depots, roads and customs procedures. Vietnam should make full use of all its advantages when doing trade with China.
Regarding the free tax policy, both ministries should increase cooperation to create a complete and comprehensive legal framework and iron out snags to create better conditions for products to be traded between both countries.
Vietnam and China also need to work closer together to combat smuggling and trade fraud.
On trade promotions in China, there is an urgent need for Vietnamese products to improve both in quality and quantity.
Reporter: Thank you very much.
Source: VOVSource: QDND
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