Cambodia, Vietnam Champions Of China-ASEAN Cooperation

 

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A worker on the assembly line at the Sailun (Vietnam) company plant, which is located in the Faudon Industrial Park.

By Dong Yan

 

With the development of economic globalization and regional integration, futures of China and ASEAN countries are more closely interlinked than ever before.

The year 2016 marks the 25th anniversary of the establishment of China-ASEAN dialogue relations. To observe up close and record the different aspects of practical cooperation between China and ASEAN in economy and trade, culture and other sectors, a China Report ASEAN staff reporter joined a Chinese media delegation organized by the ASEAN-China Center, going on a nine-day fact-finding tour of Cambodia and Vietnam from June 28 to July 5, 2016.

Sustainable Development of Tourism

According to the Asian Development Outlook (ADO) 2016 of the Asian Development Bank, Cambodia’s GDP is predicted to grow at a speed of 7-7.2 percent in 2016, making it one of Asia’s fastest growing economies.

“Cambodia is in a period of rapid development,” said Tan Qingsheng, a political counselor at the Chinese Embassy in Phnom Penh, Cambodia’s capital. “Its average economic growth rate in the past 20 years has been 7.7 percent. At present, its per capita GDP is over US$1,200. This year, Cambodia has been listed as a low- and middle-income country by the World Bank.  Although the overall level of development of Cambodia is still fairly low, its vitality and potential for economic development should not be underestimated.”

Tan believes that Cambodia’s economy is at a stage of structural adjustment and quality improvement with enhanced forces driving its growth. It is understood that tourism is the second most important pillar industry of Cambodia. Thong Khon, the Minister of Tourism of Cambodia, said that Cambodia attracted 4.77 million foreign tourist visits in 2015, 695,000 of whom were Chinese, making China Cambodia’s second largest source of foreign tourists. Last year, tourism created around 600,000 jobs for the country, generating revenue of US$3 billion. By 2020, Cambodia is expected to receive 7 million foreign tourist visits annually, generating revenue of US$5 billion, and creating 800,000 jobs.

“Cambodia is a country where historical and cultural heritage and tourist resources mutually reinforce each other,” Thong said. “Sustainable development is of utmost importance.”

Jin Zhaoyu is a cultural relics conservation engineer at the Chinese Academy of Cultural Heritage. Recently he has worked at the Ta Keo Temple-Mountain Conservation and Restoration Project at Cambodia’s Angkor Wat alongside a Chinese government team committed to safeguarding Angkor Wat.

In 1992, Angkor Wat was included in UNESCO’s List of World Heritage in Danger. One year later, UNESCO and the Cambodian government jointly launched an appeal to the international community to save Angkor, calling for financial and technological assistance around the world for the restoration and conservation of the historical site. China was the first developing country that took part in the effort. Its first restoration project, that of Chau Say Tevoda, was also the very first restoration project of a foreign cultural heritage site that China had engaged in. Upon the completion of the first phase of the project, the second phase, the Ta Keo Temple-Mountain Conservation and Restoration, started in 2010.

Jin said that experts from different countries had a very different understanding of the principles for the restoration of Angkor, and each point of view had its own merits. The Chinese team summarized their experience into a principle of “Minimum Intervention”, with the principal aim of preserving as much of the original structure as possible while focusing on the control and management of the incomplete parts, for the maximum retention of the original site. The Cambodian government and UNESCO have given full recognition to that approach.

The Ta Keo Temple-Mountain Conservation and Restoration Project, in which the Chinese government invested 40 million yuan (US$6.15 million), will be concluded by 2018. At the peak of the restoration efforts, nearly 100 Chinese and Cambodian engineers and workers were at the site.

“During the restoration, the Chinese team has also attached great importance to training Cambodian technicians,” Jin said. “They wanted to establish a talent pool for Cambodia’s cultural heritage protection and tourism development.”

Opportunities in Cooperation

Since Vietnam adopted Doi Moi (reform and opening-up) in 1986, foreign direct investment has been one of the most important drivers of the Vietnamese economy. Since the risk-resistance of the economy is relatively weak, with its industrial system incomplete, its domestic market small and its domestic demand short of its full potential, Vietnam has always made it a top priority to attract foreign investment. The Vietnamese government has an understanding of foreign investment: Only when foreign investment increases can Vietnam’s economy steadily grow.

Although China-Vietnam bilateral economic and trade cooperation has made great progress, and still has great potential, there remain some prominent obstacles that need to be overcome.

Large-scale investment of Chinese enterprise in Vietnam started in 2007, coinciding with Vietnam’s entry into the World Trade Organization. More than 400 Chinese enterprises, including New Hope Group (agriculture, animal husbandry and food processing), Supor Group (cooking utensils), TCL (smart product manufacturing and Internet application services) and Foton (automobile), began to invest in Vietnam around 2007.

What makes Vietnam attractive to Chinese investors? Wang Yuzhu, a research fellow at the Chinese Academy of Social Sciences’ National Institute of International Strategy, explained the links that exist between the two countries.

“Geographically, China and Vietnam are connected by land and sea routes,” Wang said. “Transportation is convenient. With regard to investment environment, Vietnam has advantages in labor costs. The government has encouraged foreign investment by establishing industrial parks and manufacturing areas for export commodities, supported by preferential policies, such as tax exemptions and reductions, similar to China’s development zones and preferential policies.”

Sailun Jinyu Group is a listed private enterprise that had been attracted by the above policies to “pan for gold” in the Faudon Industrial Park in Tay Ninh Province of Vietnam.

In 2008, the United States imposed anti-dumping and anti-subsidy duties on off-road tires (passenger car and light truck tires) from China. Due to these tariffs, China’s tire exports stagnated. The domestic market was also shrinking. The tire industry entered a period of little or no growth.

“To get out of the difficult situation, we had to find new space for development,” said Du Weifeng, Chief Financial Officer of Sailun (Vietnam). Rich natural rubber resources were the primary factors that led the company to relocate its foreign production base to Vietnam.

“The price of natural rubber, a major natural raw material for tire production, has been volatile in recent years, which has had a major impact on our production and operation,” Du said. “With the expansion of our company scale and the diversification of our product categories, our demand for natural rubber has increased. As one of the world’s major natural rubber processing and export areas, Vietnam ranks fifth place in the world in natural rubber production. The Faudon Industrial Park, where our factory is located, is adjacent to 7,000 hectares of natural rubber plantation and mills, which gives us easy access to natural rubber. ”

Tran Vinh Tuyen, Vice Chairman of Ho Chi Minh City People’s Committee, said that although ChinaVietnam bilateral economic and trade cooperation has made great progress, and still has great potential, there remain some prominent obstacles that need to be overcome. The worst of these is a lack of quality communication.

“On the one hand, Chinese importers are not yet familiar with the Vietnamese market, while Vietnamese exporters can not get in touch with high-quality Chinese importers,” Tuyen said. “On the other hand, famous large enterprises in China have not yet paid attention to the investment opportunities in Vietnam. They have not yet invested much in Vietnam.”

Tran noted that Ho Chi Minh City is a pioneer in Vietnam’s economic development. A series of measures are set to be taken to facilitate the flow of information and communication between Chinese and Vietnamese enterprises for the establishment of longterm, healthy and friendly economic and trade cooperation.

 

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