Depth report

　　

It takes two hours for the first durian in Vietnam to arrive at Chongzuo Youyi Pass port in Guangxi Province. Thanks to the "integrated supply chain", the import and export trade between China and Vietnam reached US $230.2 billion in 2021, surpassing US $200 billion for the first time.

Now, in late autumn, the red leaves of the North are in full bloom, and a new round of economic and trade exchanges between China and Vietnam has begun. With General Secretary of the Central Committee of the Communist Party of Vietnam Nguyen Phu Trong's visit to China, the Joint Statement on Further Strengthening and deepening China-Vietnam Comprehensive Strategic Cooperative Partnership (hereinafter referred to as the Statement) was officially released on November 1, providing new development space for the import and export of goods, economic and trade investment, and stability of the supply chain and industrial chain.

Its largest trading partner

Dongxing, a county-level city in Guangxi bordering Vietnam, is administered by Fangchenggang City. In recent decades, with the advantage of border trade, it has developed rapidly, with the charm of third-tier and fourth-tier prefecture-level cities in mainland China. Across from Dong Hing, Vietnam's Mong Street market is also popular for border trade and tourism, supporting the facade of northeastern Vietnam.

A large business newspaper reporters in Beijing residents, walking on the streets of cooperation can see a lot of wholesale and retail goods store, Vietnam more common commodities such as coffee, coconut sugar, if you want to wholesale Vietnam specialties to the mainland sales, cooperation is a very good window, some merchants will put the goods transported to mainland cooperation or pingxiang, They are then shipped to Vietnam for sale through border trade.

The Chinese Academy of Social Sciences institute of the asia-pacific and the global strategy, a researcher at southeast Asia research center director Xu Liping business newspaper reporters in Beijing, in the trade between the development by leaps and bounds in recent years, since 2016, Vietnam become China's first largest trading partner in asean, China now is Vietnam's biggest trading partner and second largest export market. In other words, Vietnam's foreign trade development is now inseparable from China.

According to Chinese customs statistics, two-way trade exceeded 230 billion U.S. dollars last year, up 19.7% from the previous year. According to an interview with Vietnamese Ambassador to China Pham Xingmei published by Vietnamese News Agency on June 30, the economic and trade cooperation between Vietnam and China has maintained a sound momentum against the backdrop of the global epidemic. In the first nine months of this year, bilateral trade between Vietnam and China totaled $132.3 billion, up 10.2 percent year-on-year.

As for the future, the statement mentioned that Vietnam is willing to create convenient conditions for the two countries to strengthen economic, trade and investment cooperation. China encourages qualified Chinese enterprises to invest in Vietnam in accordance with market-oriented and commercial principles.

Tight supply chain

Amid worries about the global economic outlook, Vietnam's economy has bucked the trend this year. According to Lianhe Zaobao, Vietnam's gross domestic product (GDP) grew by 6.5% in the first nine months of 2022, including 13.67% in the third quarter. Vietnam's GDP is expected to grow by 8% in 2022 and 6.5% in 2023. The fastest growing economy in Southeast Asia.

"The Vietnamese economy is still very much dependent on agriculture, processing and manufacturing, and we depend on raw materials from China," Nguyen Bik Lam, former head of Vietnam's statistics bureau, has said. Xu Liping also pointed out that Vietnam's economic growth figures are still very good, which is also inseparable from the strong cooperation with China.

Currently, Vietnam's most important export processing product is electronics, which ranks 12th in the world in terms of export volume, and second in terms of mobile phone exports. From Haiphong and Ho Chi Minh City, tens of millions of Samsung phones, Nintendo games consoles, LG displays and Apple Airpods are being shipped around the world.

But while electronics exports account for 40% of the country's annual exports, imports of electronic components also account for more than 60% of Vietnam's annual imports. Seventy percent of these imported components come from East Asia and more than 30 percent from China, and they basically enjoy zero import duty.

Second only to electronics, the garment and textile industry accounts for 16 per cent of Vietnam's GDP and employs more than 2.7 million people. However, the downstream, low-value-added sector, mainly cutting and processing, accounts for 70 percent of the industry, which makes it necessary for Vietnam, which has good raw material cultivation and production potential, to import fabrics on a large scale, more than 50 percent of which come from China and more than 90 percent from East Asia.

China is the largest supplier of intermediate goods to Vietnam, accounting for 41.5 percent of the country's total imports, according to 2021 data released by China Customs. Chinese Ambassador to Vietnam Xiong Bo said recently that about 54 percent of Vietnam's mechanical equipment and parts, 52 percent of its textile leather raw materials and accessories, and 40 percent of its mobile phones and parts come from China.

Hsu also pointed out that Vietnam needs to import a lot of intermediate products from China, so China and Vietnam are closely related in terms of supply chain integration, while there is still a lot of room for cooperation and development. According to the statement, the two sides are ready to implement the Memorandum of Understanding between the Ministry of Commerce of China and the Ministry of Industry and Trade of Vietnam on Strengthening Cooperation in Supply Chain Assurance to promote the security and stability of the industrial and supply chains of the two countries.

Xu Liping further analyzed that, on the one hand, Vietnam is full of confidence in the future. On the other hand, the Vietnamese government also knows that the Vietnamese economy will face many challenges and difficulties due to the gloomy global economic outlook. The higher base brought by this year's economic development will also make next year's growth more challenging. How to deal with risks effectively and strengthen cooperation with China is undoubtedly the "optimal solution".

New e-commerce land

With the increasing competition in the European and American markets and the weak consumption, more and more Chinese overseas enterprises are focusing on the close Southeast Asian market, among which Vietnam is a hot land to be developed.

Vietnam News Agency China observer Chen Hongphuc said in a previous interview that the future Vietnam-China economic and trade relations still have huge potential for development. "First, geographical advantages are favorable conditions for enterprises of the two sides to conduct trade and exchange goods by land, sea, air and rail. Second, the structure of the imports and exports of the two countries is still highly complementary. Third, the RCEP agreement (Regional Comprehensive Economic Partnership) and bilateral cooperation mechanisms will create more convenience for businesses and people of the two countries in promoting bilateral trade, "he said.

In this regard, the Statement points out that in order to promote the import and export of goods and increase bilateral trade volume, the two sides agree to promote cooperation in air, land and rail transport and create convenient conditions for this purpose. Discuss and revise the 1992 Border Railway Agreement between China and Vietnam as soon as possible. The two sides support closer cooperation between railway companies of the two countries on increasing the volume of Vietnamese goods transited through China.

In addition to the real economy, Vietnam's e-commerce environment is also growing rapidly. According to the Vietnam E-commerce White Paper 2022 released by Vietnam's Ministry of Industry and Trade in September, Vietnam's e-commerce maintained a steady growth of 16%, with retail revenue reaching 13.7 billion U.S. dollars, despite Vietnam's lowest economic growth rate in nearly 30 years. E-commerce retail sales accounted for 7 percent of the country's total retail sales of consumer goods and services, up 27 percent year on year. In 2022, Vietnam's B2C e-commerce revenue is expected to reach $16.4 billion, an increase of $2.7 billion over 2021.

Looking ahead, Vietnam is expected to be the second largest e-commerce market in Southeast Asia by 2025 ($57 billion in sales), ahead of Singapore ($39 billion) and just behind Indonesia ($146 billion), according to Metric, a data research firm that studies the global e-commerce market.

The statement also mentioned that the two sides believe that e-commerce is an important field of bilateral economic and trade, continue to implement the Ministry of Commerce of China and Vietnam's department of trade and industry cooperation memorandum of understanding on strengthening e-commerce, give play to the role of e-commerce working group on cooperation, strengthen policy communication and experience sharing, cross-border electricity development, promote cooperation in areas such as logistics enterprise, We will explore ways to strengthen cooperation in electronic payment services between banks and transfer clearing institutions of the two countries, and enhance the ability of micro, small and medium-sized enterprises to explore new channels of trade and investment through e-commerce. China will continue to promote consumption through e-commerce and expand the sales of high-quality Vietnamese specialty products in China.