Finding a sustainable path for Vietnam-China trade

VietNamNet tries to find the causes and identify the hidden nature of complex interactions with many factors of the imbalance trade relationship between Vietnam and China.

The trade relations between Vietnam and China is asymmetric or more clearly Vietnam is weak and pinched in many ways. The trade deficit of Vietnam is $16 billion annually, more than trade surplus that Vietnam earns from the U.S. and the EU and it is equivalent to over 10 percent of the country's GDP. However, this is only immediate disadvantage. In the long term, if this imbalance is not adjusted, Vietnam will have to pay heavier price for this asymmetric relationship.

VietNamNet held a roundtable talks with a number of researchers, scientists and consultants at home and abroad to find the causes and identify the hidden nature of this imbalance relations, through which finding clues and solutions.

Part 1: Identification from history to the present

Dr. Nguyen Nha, a well-known historian said: “In the past, Chinese dynasties considered Vietnam as their satellite. They did not want Vietnam to be strong. Surprisingly, I recently saw an internal study document for the reference of their high-ranking officials, which determines that Vietnam belongs to China!”

Vietnam is a small country next to giant China. The ancient dynasties of Vietnam had to give "tribute" to hold their territory and independence. What about the economic relationship between the two countries in the feudal time?

In fact, we had to pay tribute to them, but that was just diplomacy. We still remained total independence and autonomy.

Economically, for thousands of years we have not depended on the Chinese economy. Our feudal dynasties only paid tribute. There was no economic exchange at all!

VietNamNet: When did Vietnam begin foreign trade exchanges and how did it take place?

Dr. Nguyen Nha: Until the 17th century, western traders came to our country. Lord Trinh permitted to do trade in Pho Hien (Hung Yen province at present) in the north. In the south, foreign traders were present in Hoi An.

In the Qing Dynasty in China, many officials of the Ming fled to our country. The Nguyen Dynasty accepted them and permitted them to resettle in Bien Hoa, My Tho and Ha Tien. They lived by trade. From here, the Chinese have had a certain role in the economy of our country.

In the French colonial period, the state allowed foreign traders to do business in Vietnam, with Hang Buom Street in Hanoi and Cho Lon in Saigon as very crowded trading areas. Since then trade has been expanded with many regions and countries, including China.

VietNamNet: What time did the trade relations between Vietnam and China begin developing?

Dr. Nguyen Nha: It can be said from the 1990 Chengdu conference after the two countries normalized relations. Trade between the two countries has flourished since then.

In this relationship, China takes many advantages over Vietnam. They opened the door early and thanks to capital and technology from the U.S., the West and Japan; China has grown strongly. China has taken advantage of this to keep back and capture Vietnam’s economy.

So far, the risk that Vietnam's economy is dominated by China so that it cannot develop clearly. And, I think they have not stopped here.

Dr. Nguyen Thi Dung, Vice Chair of the Foreign Economics Faculty of the University of Foreign Trade, an expert of the Japan International Cooperation Agency (JAICA), said:

In trade relations with Vietnam, China has learned very quickly from the capitalists in the West and America in the 19th century and early 20th century to "play" with Vietnam.

Along the Vietnam-China border there are a lot of Chinese warehouses that we cannot control. Smuggled goods from China are uncontrolled. Not only goods, anything that China discharges are thrown across the border, from old technology to old and ill chickens. Chinese smuggled goods have “killed” many Vietnamese firms.

After many years of opening the economy, our country has had the goods market. But it is the market of foreign goods.

Trade relations between the two sides must achieve the goal of mutual benefit. It is dangerous if in the relations, we become the place where they throw the risks to!

VietNamNet:It will be incomplete if the trade relationships between Vietnam and China is not considered in the current international relations, especially geopolitically. There are many countries that are more developed than China. If China plays unfairly, we can trade with other countries?

Dr. Nguyen Thi Dung: The problem is not that simple! We and China are neighbors. China is growing constantly to become a superpower. Trade relations between us and them cannot be stopped unless we apply the closed-door policy. We and they are both WTO members.

About 10 years ago, the G7 conference (without China) divided Vietnam into three areas of their investment. The north belongs to Japan, the central region for the EU and the South for the US.

China joined this group late and it does not accept this order. They want to seize control of the East Sea to hold the energy resources.

Duy Chien

To be continued

vietnam-china, trade relation, deficit, history