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Trading with China – Keeping up with the neighbours
Deputy Minister of Industry and Trade, Nguyen Thanh Bien looks at the challenges involved with future Chinese trade and outlines his optimism for growth.
Curbing the trade deficit remains a headache for the Government. The large deficit of $6.5 billion in the first nine months of the year has been partially attributed to high imports from China. This means that Vietnam needs to reduce the trade deficit with China in order to reduce the trade deficit in general.
The two-way trade turnover has increased sharply over the last ten years, from $2.5 billion to $25 billion by 2010.
Bien, when meeting press agencies at the Great Hall in Nan Ning province in China said Vietnam is striving to keep the trade deficit at no more than 20 percent of the export value, or $10 billion, which is a difficult task.
Bien said that in order to ease the trade deficit with China, Vietnam needs to boost exports through official channels as well as the cross-border markets. In particular, Vietnam should strengthen trade with Chinese border provinces, including Yunnan and Guang Zhou.
The following questions were put to Nguyen Thanh Bien:
Thoi bao Kinh te Vietnam: The China-ASEAN Free Trade Agreement (CAFTA) will kick off next year. Will this help Vietnam bring its goods to China?
Nguyen Thanh Bien: CAFTA has been negotiated and implemented as part of a scheduled plan, from the early harvesting plan to agreement on commodities, agreement on services and more recently, investment agreements.
From 2010, CAFTA will be implemented in a comprehensive way. I think that this will serve as the opportunity for Vietnamese enterprises to export goods to China – a vast market with 1.3 billion consumers.
TBKTVN: Do you think that Vietnam can take full advantage of CAFTA to boost exports?
Bien: Joining the free trade zone means a challenge for Vietnamese businesses, because China’s goods and services are very cheap and competitive. Therefore, Vietnam will have to make every effort to improve the competitiveness of their products.
TBKTVN: One of the most important aspects of CAFTA is the use of yuan in inner-bloc payment. How will this be implemented?
Bien: In the current context, we are striving to reduce the reliance of Vietnam’s foreign trade on some foreign currencies, especially the dollar. You may know that Vietnamese businesses sometimes meet difficulties in getting dollars for making payment.
Therefore, we have advised businesses to diversify their choices of foreign currencies and to avoid the overly relying on the dollar. They should think of using non-dollars in making payment, including the euro, Japanese yen, pound and other currencies.
As for trade with China, the Government of China has assigned Yun Nan and Guang Zhou provinces to consider using yuan in the trade with ASEAN countries.
Currently, Vietnam-China cross-border trade payment in Chinese yuan has been accepted by the central banks of the two countries. As such, we can ease the pressure of having to arrange a big volume of dollar for doing trade with China.
vietnamnet, vneconomy
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