Editor's note: Song Qingrun is a professor at the School of Asian Studies, Beijing Foreign Studies University. Sun Yitong is a research assistant at the School of Asian Studies, Beijing Foreign Studies University. The article reflects the authors' opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.
China and Vietnam are crucial nations on both the regional and global stages. China, as the largest economy in Asia and the second-largest in the world, plays a vital role in global development and governance. Meanwhile, Vietnam, an essential member of the Association of Southeast Asian Nations (ASEAN), has experienced rapid economic growth, and its international influence continues to increase. In recent years, China and Vietnam have aligned their development strategies, intensifying economic, trade and investment cooperation. This effort has resulted in complementary trade structures and the establishment of a stable and smooth industrial and supply chain system. The two countries have yielded significant achievements in the above-mentioned collaborations. Amid a backdrop of increased instabilities and uncertainties in global economic development, the stable progress of the Sino-Vietnam relations and the expanding cooperation in economy and trade not only benefit the development and well-being of both countries, but also have a crucial positive impact on regional and global prosperity.
China and Vietnam continue to deepen economic and trade collaboration
China and Vietnam are close economic partners. They have achieved new milestones in economic and trade cooperation in recent years, showcasing the tremendous resilience and development potential of their trade and economic relations. According to data from China's General Administration of Customs, the trade volume between China and Vietnam reached $230.2 billion two years ago, growing by 19.7 percent year on year. Last year, bilateral trade volume stood at $234.92 billion, with a year-on-year growth of 2.1 percent. In the first 11 months of this year, bilateral trade volume reached $206.33 billion. In the global economic and trade downturn, it is commendable for the two countries to register over $200 billion in trade for three consecutive years. China has been Vietnam's largest trading partner for 16 consecutive years, and Vietnam is China's largest trading partner in ASEAN and China's fourth-largest trading partner globally.
Chinese and Vietnamese people are engaged in close exchanges and border trade is thriving, showcasing numerous highlights in the Sino-Vietnam economic and trade cooperation. This year, as of December 5, the average daily number of inbound and outbound vehicles inspected at the Youyi Pass in Guangxi of China alone surged to over 1,400, and the number of inbound and outbound freight vehicles surpassed 400,000, a 122-percent year-on-year increase. Vietnamese agricultural products, including durian, have seen a substantial increase in exports to China, significantly boosting the income of related Vietnamese enterprises and durian-producing regions and benefitting hundreds of thousands of fruit growers. Many border cities have established cross-border e-commerce operation centers or livestreaming bases, and cross-border e-commerce imports and exports continue to grow.
Considerable progress has been made in investment cooperation between the two countries. China is one of Vietnam's vital sources of foreign investment, and China's investment in Vietnam is characterized by large stock, broad areas and rapid growth. According to data from the Foreign Investment Agency of the Vietnamese Ministry of Planning and Investment, in the first eight months of this year (as of August 20), China has invested $2.69 billion in Vietnam, with an increment ranking second among Vietnam's foreign investment sources, up 90.8 percent year on year. The two sides are also accelerating their cooperation in key projects. The Chinese-built Cat Linh-Ha Dong metro line, Vietnam's first urban light rail project, commenced operation in November 2021. It is a landmark project under the Sino-Vietnam Belt and Road Initiative collaboration, significantly reducing travel time for local residents and becoming one of Hanoi's new landmarks. Investment cooperation in green industries, the digital economy and other fields is steadily advancing, becoming new growth points for bilateral investment cooperation.
Mutually beneficial and complementary trade structure between China and Vietnam
China and Vietnam are at different stages of economic development, which determines their unique complementary advantages in economic and trade cooperation, with complementarity far outweighing competition. For instance, the trade volume of mechanical and electrical products consistently ranks first among the bilateral trade categories between China and Vietnam. According to statistics from China's General Administration of Customs, in the first 10 months of this year, the trade volume of mechanical and electrical products accounted for 43.8 percent of China's exports to Vietnam and 66.6 percent of China's imports from Vietnam. This exemplifies the close trade cooperation between the two countries in the realm of mechanical and electrical products. Meanwhile, the import and export volume of textile products ranks second among the bilateral trade categories between China and Vietnam. According to statistics from China's General Administration of Customs, in the first 10 months of this year, the trade volume of textile products constituted 13 percent of China's exports to Vietnam and 4.7 percent of China's imports from Vietnam. In addition, plant products (mainly fruits) and raw materials, minerals, and energy (mainly natural rubber, wood, fertilizers, crude oil, metals, coal and leather) are export product categories in which Vietnam has comparative advantages. China is a significant consumer market for Vietnamese agricultural products such as fruits, vegetables, cashews, coffee, tea, rice, cassava, cassava products, rubber and rubber products. The trade in these areas demonstrates that the two countries are highly complementary in trade and that their relevant industrial and supply chains are closely linked. The trade of related products has robustly driven the development of pertinent industries in both countries.
Close and stable integration in the Sino-Vietnam supply chain
China and Vietnam have deeply intertwined industrial and supply chains and stable cooperation, presenting considerable potential for future cooperation. Vietnamese economist Nguyen Bich Lam has mentioned that Vietnam's economy significantly relies on agriculture and manufacturing, with a dependence on raw materials from China. According to 2021 data released by China's General Administration of Customs, China is Vietnam's largest supplier of intermediate products, accounting for 41.5 percent of Vietnam's total imports. Chinese Ambassador to Vietnam Xiong Bo stated in an interview with a Vietnamese financial channel in 2021 that approximately one-third of Vietnam's electronic components and half of its textile raw materials were imported from China. These Chinese products played a crucial role in supporting Vietnam's exports of electronic and textile products to the European and American markets. During the official visit of the General Secretary of the Communist Party of Vietnam, Nguyen Phu Trong, to China from October 30 to November 12 last year, China and Vietnam highlighted in their joint statement their willingness to implement the memorandum of understanding (MoU) on enhancing cooperation to ensure supply chains between Vietnam's Ministry of Industry and Trade and China's Ministry of Commerce, and promote safe, stable production chains and supply chains between the two countries. As Vietnam emerges as one of the new manufacturing centers in Southeast Asia, China and Vietnam continue to expand their trade in intermediate goods. The high-quality implementation of the Regional Comprehensive Economic Partnership (RCEP) and the upgrading of the China-ASEAN Free Trade Area have provided new opportunities for deepening industrial and supply chain cooperation between China and Vietnam.
In conclusion, the Sino-Vietnam economic and trade cooperation has been fruitful. The future holds vast prospects for collaboration in various areas such as connectivity, industrial and supply chains, and the digital economy. This cooperation, which plays a positive role in the economic development of Asia and even the world, is particularly prominent amid the current global economic downturn and insufficient development momentum.