President Xi’s visit boosts Sino-Vietnamese ties to a new high
By Shafei Moiz Hali
Chinese President Xi Jinping's trip to Vietnam and Laos from Nov. 10 to Nov. 14, is actually his first overseas visit after the 19th National Congress of the CPC meeting. During this trip President Xi is expected to enhance Asia-Pacific collaboration. The President has been hailed in China and also globally as a bastion of economic integration. Xi is not only expected to attend the APEC summit but will continue to boost cooperation with Vietnam as he is also visiting the country on a state visit.
The state visit to Vietnam comes after a series of important events. Firstly, as mentioned above this is President Xi’s first visit abroad after the CPC’s 19th National Congress, during which President Xi’s name and doctrine was unanimously enshrined in its Constitution, elevating him to the status of the most powerful leaders in the past three decades. With this strong merit badge, President Xi now walks with an elevated commitment towards making the Chinese dream a reality as well as developing an interconnected world with prosperity. Secondly, the visit to Vietnam comes after President Trump’s official visit to China which is being hailed as a successful trip.
Chinese President Xi Jinping, also general secretary of the Communist Party of China Central Committee, attends a grand welcome ceremony hosted by Nguyen Phu Trong, general secretary of the Communist Party of Vietnam Central Committee, ahead of their talks in Hanoi, Vietnam, Nov. 12, 2017. [Photo: Xinhua]
Vietnam is a neighboring country of China, and President Xi recently published a signed article before his upcoming state visit to Vietnam in which he described the two nations as "close neighbors connected by mountains and rivers," Xi said that China and Vietnam have had a long history of exchange and mutual learning dating back to ancient times.
President Xi also highlighted that, “The two sides need to enhance the complementarity of their development strategies and work for substantive progress in bilateral cooperation in key areas such as infrastructure, trade, industrial capacity, cross-border economic cooperation zones and agriculture”. The two neighbors have long celebrated their political and economic ties and Xi's visit will surely bolster the already strong economic ties between the two nations. In fact China is Vietnam's biggest trade partner consecutively for the past 13 years, Both countries are parties to the ASEAN China FTA, which created the largest free trade area in the world. Apart from ASEAN China FTA, both countries are currently negotiating the Regional Comprehensive Economic Partnership (RCEP), which includes the ASEAN member states, and the six states with which ASEAN has existing free trade agreements, which include Australia, China, India, Japan, South Korea, and New Zealand.
According to Chinese statistics, China’s exports to Vietnam grew by an average annual rate of 18 percent during 2010-2016, and its imports from Vietnam grew by 26 percent. Over 70 percent of Chinese imports into Vietnam are intermediate goods such as machinery, electrical and electronic products, textiles and fabrics, base metals and minerals, and chemicals. In the last 2-3 years, other goods such as plastic and clothing products for consumer purposes also accounted for a small part of Chinese imports in Vietnam. In the first seven months of 2017, China has emerged as the largest exporter to Vietnam at US$ 31.59 billion, an increase of 15.3 percent compared to the same period in 2016. China’s first FDI in Vietnam was in 1991 when a Guangxi enterprise (China) joint ventured with a Vietnam group to open Hoa Long restaurant in Hanoi. Since then, Chinese FDI has increased, although not consistently. For example, China’s FDI in Vietnam in 2012 was US$ 312 million, while in 2013; it rose to US$ 2.3 billion. As of March 2017, the cumulative Chinese FDI stood at US$ $11.19 billion for 1,616 active projects.
A new China-Vietnam cross-border trade zone in south China's Guangxi Zhuang Autonomous Region has opened; which will create about 100,000 jobs and help lift 350,000 people out of poverty in the border area. China's Photovoltaic (PV) Industry Association was setup in Vietnam, the first Chinese trade association established by the China Chamber of Commerce in Vietnam aimed at boosting economic and trade cooperation between the two countries.
The people to people’s exchanges between the two countries is also experiencing highs, Vietnam welcomed over 3.2 million Chinese visitors in the first 10 months of this year, enjoying a year-on-year surge of 45.6 percent.
This year’s APEC is going to focus a lot on e-commerce. With this regard Alibaba’s founder Jack Ma is also visiting Vietnam and Vietnamese Government has sought his inputs and help in the plan for developing e-commerce in the 2016-2020 period, which aims for 30% of the Vietnamese population using e-commerce and average e-commerce revenue reaching US$350 per person per year. PM Phuc spoke highly of the Billionaire and said, “Vietnam needs Alibaba’s support to set up an e-commerce ecosystem to help Vietnamese farmers and traders boost exports.”
To conclude, Vietnam and China ties have witnessed ups and down in the past, but one thing has remained on a constant trend of gaining momentum and that is the trade between the two countries. President Trump’s speech at the APEC reinforces the “America First” rhetoric as once again, Mr. Trump’s focus was on bilateral trade agreements and criticism for the WTO, while in contrast President Xi again came out as the bastion of global trade and openness, this is a strong indicator for Vietnam and the other countries that China under the leadership of President Xi is on a path to build strong and balanced trade relationships based on mutual gain.
(Dr. Shafei Moiz Hali studied at George Mason University, Virginia, USA and specialized in the field of International Commerce and Policy. He did his PhD from Huazhong University of Science and Technology, Wuhan, China specializing in Chinese foreign policy focusing on the Belt and Road Initiative and energy issues. Currently Dr. Hali is working as an Assistant Professor with the Faculty of Contemporary Studies, National Defence University (NDU) Islamabad, Pakistan.)